How to use Foreign Tax Credit to offset US Tax on the same year for house sale

[xkrz]

I work in the US, in the past, when I got Foreign Tax Credits for taxes paid in Canada, I was told I can use that credit for the future year, but not the same year in US. I sold my Canada house last year, and I am concern that I cannot use the taxed paid in Canada to offset the tax obligation in the US for the same tax year. Can someone help me explain what I need to do to use the tax credit for the same tax year?

I have heard that it have to do with Paid Basis to Accrued Method, but not sure what that means.

[nelsona]

You were given incorrect information.

For US, FTCs are to be used on the year they are incurred , subject to limitations, AND THEN can be carried forward up to 10 years, or carried back one year.

For Cdn taxes, non-business FTCs can be used ONLY in the year they were incurred.

So how have you been filing your FTCs in the past, under this false notion that you could not claim them right away?

[xkrz]

Thank you nelsona. Interesting. Actually Deloitte file for me for the first few years as part of my relocation package. I continue what they did after with consultation. I was explained that the tax credits I got, are for future years, that left me the impression I can't use it in the same year. The two type FTC I got before were for regular wage, and passive income, which both can only offset respective foreign earning. Since I was only in the US, there is nothing to offset.

[nelsona]

So you had a job in Canada while you lived in US? This income would be reported on your 1040, so you could use the CDn tax on that wage, as an FTC in that year. Or was this only in the year that you moved?

Your house sale is passive, so any built up CDn tax that you did not used can be added to the CDn tax on the sale of the house.

[xkrz]

No, I didn't work in Canada after I moved. It was for some unvested stocks that was awarded in Canada.