This is a multi-part message in MIME format.
---------------------- multipart/alternative attachment
QUESTION:
I sent this earlier but I,m not sure if it went through si I apologize if its a repeat.
I have a partnership in a real estate trust in the USA and have held it for approx 7 years.The trust held a number of rental and commercial properties and I received monthly income checks from the rental income and occasionally a check when a property was sold.( US witholding taxes were always paid before I received the check)
Over the years beginning in 2000 they have started selling some of the properties and creating capital gains.
Each year I receive a T5013 which I input into Quicktax.
This years T5013 had the following info on it
box 18 2563.93
box 19 2563.93
box 23 1797.41
box 26 26.74
box 45 7587.00
Details - Box 33: Foreign taxes paid on US source income Business: 60% Non- business 40%
There was also an explaination letter attached which I will paraphase below.
Box 23 Capital Gains ( Losses)
The ammount shown is your share or the capital gain on the sale of the property and relates to a US sourced non business income. The ammount represents 100% capital gain and only 50% of it is taxable capital gain.
Box 33 Foriegn tax credit
The US sourced business income taxes paid relate to the partnerships rental business and the US sourced non business income taxes paid relate to the foreign capital gain on the sale of a property shown in box 23.
Please note that in certain cases computerized tax software programs mistakenly account for the non business foreign tax on tha capital gain as a deduction from taxable income under subsection 20(11) or 20(12).The program should instead claim a foreign tax credit (on Schedule 1 and its provincial equivalent) for non business taxes paid.
My questions are
1,Does Quicktax deal with the non business income correctly? It doesnt look like it does as there are no figures automatically inputed into the T2209E form for the non business income and corresponding tax.The business income figures go in ok.( I have inputed into Quicktax the 40 60 tax split figures)
2, I spoke with a person at CCRA who deals with FTCs.
His interpretation was that the whole ammounts in boxes 19 and 23 was non business income and shouldnt be split up.
Is this correct or should I be using box 19 as business income and box 23 as non business income with the corresponding tax breakup.
3, Because the letter stated that only 50% of box 23 is taxable capital gain should I be splitting this figure in half before I enter it onto the T2209E form.
Thanks for your help
XXXXXXXXX
============================================
david ingram replies:
1. I have managed to avoid QuickTax and have no idea how it works.
The only computer program I know of that always looked after the foreign tax credits properly was one I wrote myself and used for the last twenty years but abandoned this year.
I am using the professional version of CANTAX which does not handle foreign tax credits well either. There are too many input possibilities and after 30 or so, I still cannot just go to the program and put in the figures.
When putting a T5013 in, I just overwrite the fields on the jacket to get the information in to the program.
2. His interpretation sounds wrong if Box 23 was a capital gain. Only 50% of the box 23 amount should end up on line 127 of your return. If all else fails, throw the amount into a T3 capital gain box. The answer will be the same.
3. Only 50% (the net) should be on the T2209. The CRA also likes suggesting that only 50% of the tax paid on a capital gain should be allowed.
Hope this helps -- Remember that MONEY Magazine gave 64 copies of computer tax software to their employees a few years ago. Only 4 out of 64 returns were prepared correctly using the software.
Most of the time, it takes more time to figure out how to use the program than it does to do the return by hand.
We prepare tax returns for 43 States and a whole bunch of cites as well as Canada, the US and, of course, Quebec.
My method when trying to do a New York or Philadelphia City return is to print it out and do it by hand. Then I try the computer to see if it works. I usually end up overwriting something. Usually it is because the program needs you to go two or three levels down to get a figure in and it can take three hours to figure out where to go.
However, the worse I know of are getting the Foreign tax credits in for forms like a T5013. You are a brave (and stubborn) man for attempting it. My hat is off to you.
Just remember!
A good friend will come and bail you out of jail...but, a true friend will be sitting next to you saying, "Damn...that was fun!"
David Ingram's CEN-TA Group
108 the Gallery
100 Park Royal South
West Vancouver, BC, CANADA
V7T 1A2
BUSINESS(604) 980-0321
My personal cell number is (604) 657-8451
MY RESIDENCE IS (604) 980-3578
You are welcome to call my cell seven days a week from 10 AM to 10 PM - To stop getting 25 phone calls at 9 AM on Monday Morning, I would rather that you phoned at 2 PM on sunday or 7 PM on Saturday than save the call up for Monday morning.
Always try my cell first since I call forward it to my house or office. There is no message service on any of the numbers. If you do not get me, try again in two hours. I was likely either in a movie (every Tuesday night with my kids) or in a self-defence class (every Thursday night with my kids).
Hope this helps
david ingram
This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate gambling refunds for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, Antarctica, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and Canadian and Mexican and any of the 43 states with state tax returns, etc.
income tax wizard wizzard guru advisor advisors experts specialist specialists consultants taxmen taxman tax woman planner planning preparer of Alaska, Alabama, Arkansas, Arizona,
California Denver Colorado, Connecticut,
Delaware District of Columbia Miami Florida,
Garland Georgia, Honolulu Hawaii, Idaho, Illinois,
Indiana Des Moines Iowa Kansas Kentucky,
Louisiana Bangor Maine Maryland
Boston, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, Montana, Nebraska,
Nevada, New Hampshire, New Jersey,
New Mexico,New York, North Carolina,
North Dakota, Ohio, Oklahoma, Oregon.
Paris, Rome, Sydney, Australia Hilton
Pennsylvania, Rhode Island, Rockwall,
South Carolina, South Dakota, Tennessee,
Texas, Utah, Vermont, Virginia,
West Virginia, Wisconsin, Wyoming,
British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, Quebec City,
New Brunswick, Prince Edward Island,
Nova Scotia, Newfoundland, Yukon and
Northwest and Nunavit Territories,
Mount Vernon, Eumenclaw, Coos Bay
and Dallas Houston Rockwall Garland
Texas Taxman and Tax Guru and wizzard
wizard - David Ingram's US/Canada Services
US/Canada/Mexico Tax Immigration & working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321
[email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
Your name has been added to our email list because of an enquiry we have received, we may not answer your question but
another similar question will be as we lump them.
You may find more answers at www.centa.com
If the number of messages is too many for you or the US / Canada Taxation and Immigration information is not of interest, simply reply with a remove request.
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
---------------------- multipart/alternative attachment
An HTML attachment was scrubbed...
URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/e1c1bbff/attachment.htm
---------------------- multipart/alternative attachment--
What's Related