Manu34

Thanks Clw, but I have tried many times already. My patience has run out. I actually got to talk a couple of times to those 'Tier 3 agents' and believe or not I got two different answers. The whole experience was painful. Emmanuel

Good morning, I've made my decision. I'm going to take a leap of faith and re-submit my tax return using a full deduction under section 20(12). I don't see any other way of cancelling out the taxes paid to the CRA due to this income, and this is in-line with what's stated in the French/Canadian tax treaty: “…income or gains arising in France shall be deducted from any Canadian tax payable in respect of such profits, income, or gains…” As a consequence of deducting the entire net rental income, the calculation of the FTC is now nil (i.e. the net rental income is more than the foreign tax paid). My only concern is that since I will re-file electronically, the 20(12) deduction that appears as "Other deductions (specify)" on line 23200 of my T1 may raise some flag. When looking at the complete Tax Return generated in uFile, there's a drop down menu called "SEE LIST" on line 23200, and I would assume the intent here is to indicate the reason for the "Other deduction". Unfortunately there is no drop-down menu popping up when clicking on the "SEE LIST" option... Is this normal? Is their a way to indicate what the deduction is for before submitting electronically? Thanks Emmanuel

FYI: This link you provided at the end of your response does not apply to me. As per the below, it is for non-residents receiving rental income from Canada... not the other way around... Rental income and non-resident tax This section provides information for non-residents who receive rental income from real and immovable property in Canada

Hi Clw, Thanks for helping. This webpage seems pertinent to my problem. I'll have a look at it shortly. Emmanuel

Thanks Maggie3, The procedure you provided is exactly the one I followed to add my foreign rental income, that, I had figured already. It's unfortunate you haven't answered any my questions, but no worries. You made a good point about the tax treaty (I've read it many times over). The wording clearly states that the “…income or gains arising in France shall be deducted from any Canadian tax payable in respect of such profits, income, or gains…” which means that, and I'm sure everyone would agree, this particular income should be removed or "wiped out" from my CRA tax return. I don't think it leaves much room for interpretation. The key issue I'm having is how to technically makes that happen, when you have to report your world income. This rental income has to show somewhere (the T776) and then must be removed somewhere else. As I mentioned earlier, when both the Federal and Provincial FTC's are applied, the taxes I get back are way lower than the taxes I paid in France... How can I manage to wipe out this income, and do it "by the book"? Thanks for sharing the CRA link. I will have a look at it shortly and see if I can find some answers. Emmanuel

Hello, A bit of background first: I’m a Canadian resident, and I pay the bulk of my income tax in Canada. However, I also happen to own a condo in France from which I get rental income. This income is first taxed in France (as per tax treaty in place), and then also taxed in Canada (have to report world income). The tax treaty currently in place between the two countries states that the same income cannot be taxed twice, and according to the CRA the way to go about it is to claim an FTC against my Canadian income tax. The idea is that I would get my money back for the tax paid, whichever is less. Here are some numbers: Gross French rental income: $6500 Taxes paid in France (solely based on this income): $2500 Extra Taxes paid in Canada for the same income: $2400 Tax amount I should be able to claim with the CRA (the lesser of the two paid taxes): $2400 My questions are as follows: If I use the “Foreign rental income” option from under the interview / “Foreign income and property”, this allows me to claim an FTC and generate the Federal T2209 + Provincial T2036. All is good… except for two things: When filling out the “Foreign rental income” page, if I leave the “Foreign rental income entered as income” field blank, the net foreign rental income is added to my overall income, and that’s on top of the income declared in my T776. Basically, the same income is counted twice. The only way to not count this income twice is to enter the same amount in both fields “Net foreign renal income or loss” and “Foreign rental income entered as income”. Is this the expected behavior in uFile? Is it supposed to work that way? Note: I reached out a couple of times to the CRA, and they always told me I had to fill out a T776 even if my income was foreign… The max FTC I can get by using the T2209 + T2036 doesn’t come close to what I should be getting back: Only ~ $1700 (out of $2400). What is your recommendation to make up for the shortfall? I’ve searched for answers on a lot of forums and it seems that I can also make use of subsection 20(12), which happens to be the last option available from the last field called “Limit of foreign tax credit and deduction (T2209). But here is the thing: The amount claimed as 20(12) has a direct impact on the FTC calculation. In other words, the more you increase the 20(12) deductions, the less you get in FTC. In my case, I did manage to add enough 20(12) deductions to get the tax amount of $2400 back… but the amount of FTC has been wiped out completely. Again, is this the expected behavior? Any general feedback on how to best apply a “credit” for this foreign rental income without attracting CRA’ s attention is welcome... I just want to do things by the book. Thanks, Emmanuel