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New Member
posted Oct 30, 2019 6:37:10 PM

I sold a US vacation condo and filed CRA Taxes for 2017. IRS with-held 15% but sent back some money in 2018. Do I adjust my 2017 form or report this income in 2018?

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New Member
Oct 30, 2019 6:37:11 PM

Hello Steve3...thank you for asking this question.

The amount withheld and refunded to you reflects the actual 2017 US tax liability.  As you received some monies back based on the 2017 US income, it appears you were required to file a US return, or a US assessment determined that 15% tax was more than required.  So the actual US tax liability will be the net amount still held by the IRS.  As you would have reported the 15% on your CDN return as foreign taxes paid, you will need to file an adjustment to reflect the lower US tax liability, as this will affect the Foreign Tax Credits on your Canadian tax return.

Bottom line...because you were refunded part of that tax withheld, your Canadian return is now inaccurate and needs to be corrected.

Please refer to this link for information on how to file an adjustment.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/change...