Canada Tax Questions Answered by Experts
Yes, so sorry, this IS one of the bigger IRS "gotcha's" for Dual status AND US residents having income from Canada.
Just so that you can do a reality check the limitation works like this:
"Your foreign tax credit cannot be more than your total U.S. tax liability multiplied by a fraction. The numerator of the fraction is your taxable income from sources outside the United States. The denominator is your total taxable income from U.S. and foreign sources."
So, given that... there are two other thing to keep in mind. FIrst in the event that you have had r will have a different situation;if you have foreign taxes available for credit but you cannot use them because of the foreign tax credit limit, you may be able to carry them back to the previous tax year and forward to the next 10 tax years. Refer to Carryback and Carryover in Publication 514, Foreign Tax Credit for Individuals
Also, you can look at the foreign tax DEDUCTION.
I hope this has helped.
Please let me know if you have any questions at all.
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I have a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security/Medicare, estate, corporate, both for-profit and non-profit, and tax advice on three continents, since 1986. …