The Federal Tax Credits Blog

Posts Tagged ‘multimedia’

Question: canadian foreign tax credit?

I worked in Canada for some time and have unused foreign tax credit available. I am working in US now and would like to take advantage of the Foreign Tax Credit Carry Forward available. Is that possible with out working in Canada. For example through some CD, Bond investments in canada

Answer: Sorry, CD, bond investments, etc. are passive source income and only the foreign tax on passive income can be used as a credit against the U.S. tax on the passive income. And passive income is broken into two categories: passive and high withholding tax interest.

However, if your job takes you out of the country for any short period of time, say three days to Canada, then a prorata portion of your U.S. salary becomes “foreign source general limitation income”. You can use your Foreign Tax Credit Carry Forward against the U.S. tax on this portion of your U.S. salary. Better yet, you aren’t in Canada for long enough period of time for Canada to tax you on the income during your short stay.

The foreign tax credit is claimed on IRS Form 1116 which lists the “categories” of foreign income. Only the foreign tax on each category can be used as a credit against the U.S. tax on that category’s income.

The World According to Gold

Ah….Christmas in Buenos Aires. At the risk of incurring the disdain of the family oriented, I revel in the absence of the cumbersome familiar Yuletide agenda. Instead of turkey, this year there will be steak and steak, with some more steak.

Investment TV-howto save Tax through Charity Donation