Turbotax filling of US capital gains

[alegomaris]

I have sold stocks from a private company in the US; I understand I will be paying taxes in the US and also that to report in Canada the taxable capital gain has to be 100% instead of 50% due to the nature of the company transaction. Can TurboTax in any of the service forms deduct the taxes payed in the US and adjust the taxable capital gains to 100%?

If yes, which product would work and how could the capital gain be adjusted if it is set by default to 100%.

[TurboTaxKim]

Can you provide us with a little more information in regards to this, please?

We are not aware of any special rules in which you are required to pay tax on 100% of a capital gain, regardless if it is foreign property or not. If this is a unique situation due to the nature of the company transaction, can you please let us know how you have been advised to report this?

We can then advise you on how to report it in TurboTax to reflect that ruling, as well as ensure you are getting a Foreign Tax Credit on any tax withheld in the US.

You can contact us directly via social media,

TurboTax Canada FaceBook 

TurboTax Canada Twitter 

or provide some more information here. 

[alegomaris]

The reason the taxable capital gain would be 100% is because the transaction is classified as a "Disposition of an interest in a partnership to a non-resident or tax-exempt entity". The tax advisors at my company specified that the capital gain would be taxable at 100%. And also reading on the CRA website (https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4037/capital-gains...), it seems the transaction indeed has to be taxed on 100% of it.

Would you advice me on how to report this. Thank you.

[TurboTaxHeba]

This information is corrected:

If you are using the TurboTax CD/Download version, follow these steps:

• access the "Forms" view  from the top blue bar
• while in the Forms screen --> you can open the schedule 3 from the forms at the bottom of the screen beside your name
• Report the 100% capital gain on line 50410

 I hope this was helpful

[alegomaris]

Thank you. I already have a review scheduled for Saturday, to review what I have input into the online turbo tax. Should I cancel this, so that I can move my tax information into the downloaded version? If I use the downloaded version, will I be able to easily transfer my information from online? Also, will I be able to schedule a review of my taxes before filing with the downloaded version?

[TurboTaxKim]

@alegomaris

We have checked further into this and there is no need for you to switch from the Online version to the Desktop version as the entry can be made in the online software.

To do so, from the sidebar in TurboTax Online,

• click on Income > Investments > Capital Gains and Capital Gains Deduction Profile.
• check the box beside Capital gains from the sale of a partnership
• this will then trigger a box to appear on the Capital Gains Summary page allowing you to enter the Capital Gains at a 100% inclusion rate. 

To sum things up, there is no need to use the CD/Download version of TurboTax and you can keep your scheduled review appointment on Saturday using the Online version. We have tested this, the calculation is correct and the entire amount you enter in this box will show up on Line 19900. You may want to refer to this interaction with the agent doing the review.

I have attached screenshots showing how to enter this amount, as well as a shot of the Schedule 3 itself showing the correct inclusion.