@aroy0911 , I looked over the US-Canada tax treaty and there is really no assertions that you can make other than relief from double taxation on "alienation of real property". Thus your recourse is to apply for foreign tax credit.
Under federal taxes, under credits & deduction you get to choose foreign tax credit. This will trigger questions for form 1116. There you will asked for foreign source net income -- you enter the total foreign income you got from the sale of the prop. i.e. sales monies less US basis and before income tax by Canada.
This should work and if not , go to forms mode and enter the foreign income associated on the form 1116.
Is there more I can do for you ?
pk
