US credit for Canadian tax on US dividends

readtheform · Post by **readtheform** » Tue Mar 09, 2010 4:49 pm

I am US citizen, living/working in Canada for the second half of 2010. I want to avoid being doubly taxed on US dividends during the time I was in Canada. My tax software doesn't seem to be doing this part for me and the instructions are a bit vague. It seems to claim US credit, I just fill out worksheet on the back of Pub. 514 and then I enter the result on a Form 1116. Do I use a separate Form 1116 for this or do I add it to my "general income" Form 1116? Do I need to send in other documentation? Is it better to instead claim the credit against Canadian taxes?

Thank you!

nelsona · Post by **nelsona** » Mon Mar 15, 2010 6:32 am

Re-sourced income, separate 1116

bruce · Post by **bruce** » Tue Mar 16, 2010 10:26 pm

It appears that readtheform was a USC and resident of Canada when these US dividends occurred. So US gets first dibs on the taxes. I think he/she needs to collect the FTC on their Cdn return (up to the 15% treaty rate) and then anything above that by re-sourcing on his US return.

For reference, that was my understanding from the exchange on November 20 in this thread: http://forums.serbinski.com/viewtopic.p ... highlight=

nelsona · Post by **nelsona** » Wed Mar 17, 2010 6:09 am

That is what he is referring to.

Answers in march will be incomlete. That;s the chances you take.

nelsona · Post by **nelsona** » Wed Mar 17, 2010 6:20 am

I invte any out there to take on any question. Please.

bruce · Post by **bruce** » Wed Mar 17, 2010 7:17 am

It wasn't really obvious to me that he was referring to recovering tax above the 15% treaty rate. I don't see how you were able to make that assumption from what he wrote. In any case, I just hate to see anybody mislead by an "incomplete" answer.

nelsona · Post by **nelsona** » Wed Mar 17, 2010 8:25 am

You are right.

Consider me gone.

bruce · Post by **bruce** » Wed Mar 17, 2010 8:33 am

Sorry. I was just trying to help.