Canadian Govt Grants and 1040 Reporting

ND · Post by ND » Wed Apr 24, 2013 3:07 pm

Thanks for the reply.

"However, I would not say that the IRC section you quote has any bearing on this at all. That is for alimony and support payments, not govt payments."

Why care about that Section being specificially titled for alimony and support payments and not govt payments, when the underlying principle being compared for UCCB is the same, in that the US govt - excludes from gross income - benefits paid to assist with child rearing!? The Code nowhere discusses Canadian child rearing benefits, so isn't it up to us to best decide how IRS would characterize and under what Code Section it best fits based on underlying reasoning and govt policy?

nelsona · Post by **nelsona** » Wed Apr 24, 2013 3:52 pm

That section of the code is speaking SPECIFICALLY about alimony. Period. You know that the code does not contain principles, it contains regulations.

That is like saying that since the IRS has code which specifically makes certain funds set aside for retirement as non-taxable, that ANY funds YOU decide personally to put aside for retirement should be non-taxable as well.

Doesn't work that way.

I've said what I have to say on this, and since UCCB is only paid to Cdn residents, and thus inclusion will not result in any US tax, unless you find a more germane code section, I'm moving on

ND · Post by ND » Fri May 24, 2013 11:29 am

http://forums.serbinski.com/viewtopic.p ... light=uccb
At above link, Nelsona, I'm understanding you to say that UCCB is NOT taxable on 1040 and on this discussion, I'm understanding you to say that UCCB IS taxable on 1040. Can you please help straighten me out, as I know you talk only sense, and I'd like to understand you. thanks.

nelsona · Post by **nelsona** » Fri May 24, 2013 12:13 pm

I learned between 2011 and 2013.

Live in the here and now

nelsona · Post by **nelsona** » Fri May 24, 2013 12:15 pm

ND, Do you have a client that actually owes IRS money if they report UCCB.

I didin't think so.

ND · Post by ND » Sun May 26, 2013 3:18 pm

I actually do. His CA excluded his income as scholarship exempt (during a recent tax year when CRA exempted such) but the income doesn't qualify as a true scholarship excludable under IRC definitions and under IRC is earned income that is includible. He has children and claims (refundable)ACTC on 1040 and UCCB affects his return dollar for dollar (doesn't want to exclude his income as foreign earned since that will eliminate all earned income and his ACTC refund, yet doesn't have significant tax in Canada to claim as FTC on 1040). So, a tax-free Cdn situation where earned income on 1040 produces a refund and no FTC claim. The dollars/exemptions are such that a reduction in income (UCCB) can increase his refund.

nelsona · Post by **nelsona** » Sun May 26, 2013 10:19 pm

Too bad. I guess that is why he is paying you, and not me.

All the best.

nelsona · Post by **nelsona** » Sun May 26, 2013 10:19 pm

ND, what is your blog?

ND · Post by ND » Mon May 27, 2013 5:38 pm

I 'm not certain what you mean in your question about blog. If this helps: I don't blog, don't have a blog and am not a blogger.

Also, are you a partner at Serbinski?

nelsona · Post by **nelsona** » Mon May 27, 2013 7:45 pm

Look at my signature.

Just wondering why a pro would be asking questions for his clients on another CPA's website.

ND · Post by ND » Wed May 29, 2013 11:08 am

I have access to free attendance at this course next week otherwise costing 2k http://www.federatedpress.com/pdf/UCUS1306-E.pdf. Director e-mailed me this: we have a complimentary guest pass to offer you. Please let me know if you or a colleague would like to attend the conference free of charge and I would be delighted to make the arrangements.

Would you like to attend for free? We can meet each other there and I can address your past two forum questions there, as the answers are multi-faceted, lengthy and more suited for a face to face conversation than a forum.

nelsona · Post by **nelsona** » Wed May 29, 2013 11:58 am

The question seemed simple enough.... thanks for the offer, but cannot make it.

Perhaps a website development seminar would also be in order.

Sylvia · Post by **Sylvia** » Wed May 29, 2013 12:09 pm

I was reading through the 1116 instructions and I was wondering if the following applies to CCTB (found in Specific Instructions, Part I on page 15):

"Lines 1a and 1bâ€”Foreign Gross Income

Include income in the category checked
above Part I that is taxable by the United
States and is from sources within the
country entered on line g. You must
include income even if it is not taxable
by that foreign country"

Maybe this is just for the purposes of calculating foreign tax credits? I didn't see any similar qualifiers in the instructions for the 2555 or the 1040 about whether foreign income only needs to be reported if it's taxed in the foreign country.

nelsona · Post by **nelsona** » Wed May 29, 2013 1:23 pm

CCTB is not taxable in US, so it wouldn't even appear on your 1040 or 1116.

What that is talking about is income like CCP and OAS for example, which is not taxed in Canada, or, when you work in Canada for ashort period of time. The income is not taxed in Canada, but it is Cdn-sourced. It is all taxed in US.

This is a good way of getting more carriedforward tax back from years when you pay no Cdn tax, but pay US tax on Cdn income.