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Get your taxes done using TurboTax
Hi Ralph
Thank you so much for your response and is deeply appreciated.
Here are some aspects.
1. Canada and USA have income tax agreements to prevent dual taxation.
2. I have no issues in paying the taxes on the income which originated out of my RRSP.
3. For practical purposes if I report my additional income as $75000 which is the total distribution and since I already paid $18750 to Candian govt. How do I show this amount to offset my total taxes owed to IRS. I am unable to offset the taxes already paid to Canadian Govt. using form 1116.
4. There was flag which came up while using form 1116 in TurboTax which I am indicating below, and I have no clue what it is all about, (This may be due my playing around with form in Turbo Tax)
High Tax Kickout Income
In some cases, passive income and taxes must be treated as non-passive category income and taxes. Generally, passive income and taxes must be treated as another category of income if the foreign taxes you paid on the income (after allocation of expenses) exceed the highest U.S. tax that can be imposed on the income. (Currently the highest U.S. tax rate is 37%.) In most cases, the reclassified income will be treated as general category income.
See Publication 514 and Regulations section 1.904-4(c) for more information.
Thanks
‎February 6, 2023
1:03 PM