On form 1116 (Foreign Tax Credit), how are expenses, losses and other deductions that are not definitely related to one category of income apportioned between all categories of income?
Publication 514 (page 13) says:
“… they are apportioned under the principles of the foreign law. If the foreign law does not provide for apportionment, use the principles covered in the U.S. Internal Revenue Code.”
So, does Canadian law have any rules for apportionment of expenses, losses and other deductions?
Form 1116 - Apportionment of Expenses Losses and Deductions
Moderator: Mark T Serbinski CA CPA
Re: Form 1116 - Apportionment of Expenses Losses and Deductions
No, just use what the software spits out
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Form 1116 - Apportionment of Expenses Losses and Deductions
I don't have software right now. I am just making a spreadsheet to do the basic calculations for a U.S. return to help me with some investment decisions.
But I take it your point is that you don't know of any Canadian rules for apportionment of expenses, so there likely aren't any.
But I take it your point is that you don't know of any Canadian rules for apportionment of expenses, so there likely aren't any.
Re: Form 1116 - Apportionment of Expenses Losses and Deductions
It will be prorated.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Form 1116 - Apportionment of Expenses Losses and Deductions
nelsona wrote:
> It will be prorated.
I'm not sure what you mean by "prorated."
Do you mean the amounts will be divided amongst the income categories in proportion to the income in each category?
> It will be prorated.
I'm not sure what you mean by "prorated."
Do you mean the amounts will be divided amongst the income categories in proportion to the income in each category?
Re: Form 1116 - Apportionment of Expenses Losses and Deductions
Yes. Get some software.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Form 1116 - Apportionment of Expenses Losses and Deductions
nelsona wrote:
> Yes. Get some software.
Thanks again.
For sure I intend to get software next month when I do my taxes. Right now I am just making a spreadsheet to do some basic tax U.S. tax calculations for some investment ideas I am considering.
> Yes. Get some software.
Thanks again.
For sure I intend to get software next month when I do my taxes. Right now I am just making a spreadsheet to do some basic tax U.S. tax calculations for some investment ideas I am considering.
Re: Form 1116 - Apportionment of Expenses Losses and Deductions
By the way, can you recommend a good software package for doing U.S. tax returns for U.S. expats living in Canada?
Re: Form 1116 - Apportionment of Expenses Losses and Deductions
I use txact online, others use turbotax.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing