Foreign tax paid - URGENT!!

groobi · ‎October 25, 2021

My client has a capital gain of $60K (sale price 360K, cost at the time of immigration 300K) on sale of foreign real estate and foreign tax paid is $50K. I completed S3 and FTC (Income not linked with this form and Foreign tax not linked with this form under Real Property). The problem is that the foreign tax paid is automatically recorded on 20(12) deduction and 20(11) section is blacked out. How can I fix this?

groobi · ‎October 26, 2021

It seems more complicated than I thought..

biny0111 · ‎February 07, 2022

I have the same issue. How did you resolve?

ProFile Duncan · ‎February 07, 2022

Hi, thank you for using Intuit ProFile Community

ProFile calculates the best combination of the foreign tax credit and section 20(11)/ 20(12) deductions. Areas greyed out on the FTC screen indicate items not allowed for income in a particular column.

In the case of a 60K gain and 50K tax, ProFile is indicating that the section 20(12) deduction results in the lowest tax payable, ( if you determine a section 20(12) deduction is allowed). The result will vary depending on other income reported. If you override the section 20(12) amount to zero, only foreign tax credit will be used. I think you will find the tax payable increases. You should always determine whether or not a section 20(11) and 20(12) deductions is allowed for the foreign income you are reporting.

Hope this helps