How to determine part 2 of form 1116

[confused_canuk]

I am a Canadian citizen, living and working in Canada so have T1. However I have dual citizenship, so also need to file US taxes.

I am trying to fill out form 1116 for my general and passive income and am stuck trying to figure out how to determine the foreign taxes paid on general income and taxes withheld on interest in Part 2.

Do I use information from my T1 to calculate this section? and if so how?

[nelsona]

Yes, always use the tax accrued method for 1116. tax accrued can only be determined on your Cdn tax return.

[confused_canuk]

I found the following calculation under "allocation of foreign taxes" on Pub 514:

General category income
1) wages/total income x deductions = expenses allocable to wages
--> is this line 101/line 150 x line 233 from my T1?

2) subtract your total wages by number generated in (1) = net wages
--> again, I assume this is line 101 from my T1

3) net total wages/net total income x income tax deducted = allocation of foreign tax to general wages
--> is this the number generated by (2)/line 236 x line 435 from my T1?

What about CPP and EI? Should these figure into the calculations anywhere?

________________________________________________________________
Passive category income
1) interest/total income x deductions = expenses allocable to interest
--> is this line 121/line 150 x line 233 from my T1?

2) subtract your interest by number generated in (1) = net interest
--> again, I assume this is line 121 from my T1

3) net interest/net total income x income tax deducted = allocation of foreign tax to interest
--> is this the number generated by (2)/line 236 x line 435 from my T1?

I assume CPP and EI won't come into play for this calculation.