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20(11) Deduction

Can I take this deduction on a T3 Trust return where 100% of the income is being allocated to beneficiaries? Taxcycle has calculated the deduction and reduced the amount of foreign income to allocate but it’s not on any of the schedules submitted to CRA. It’s only on the worksheet. Is this an error?

Hi,

This is working as designed from our perspective since all the income is being allocated to the beneficiaries…according to IT-506:

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/it201r2/archived-foreign-tax-credit-trust-beneficiaries.html#P381_8783

" Deduction from income

¶ 9. While the rules in subsections 104(22) to (22.3) apply for the purposes of section 126, they do not apply for the purposes of subsection 20(11) or (12). As a result, a beneficiary cannot claim any non-business income tax allocated to it under these rules as a deduction from income under subsection 20(11) or (12). For more information on the deduction under subsection 20(11) or (12), see the current version of IT-506, Foreign Income Taxes as a Deduction From Income ."

~ Rob

Thanks Rob,
Makes sense!