Foreign Tax Credit for U.S. Rental Property

T1
1

A client who is a U.S. citizen living in Canada owns a rental property in California. I report the income and expenses on Form T776. How do I claim a foreign tax credit for the California taxes paid? If I enter the net income and tax on the Foreign Income screen, it double-reports the income that’s already entered on the rental statement.

I’ve already efiled this return by overriding Lines 43100 and 43300 on Form T2209, but it seems strange. Is there a better way to do it?

2

I have the answer from TaxCycle support! I enter the foreign tax in Part 2 of Form T776.

3

Thank you for your reply. T776 is for real estate property. The taxpayer is a part-time Uber driver, and his motor vehicle expense is reported on the motor vehicle worksheet. Chart 3 is for CCA computation and reporting. Hence, T776 is not applicable in this situation. Thank you.

Best regards,
Tanny