I have a question about TurboTax Audit Defense and 20(11) 20(12) complexities.
Short story: Will TurboTax handle the details with Canada Revenue Agency on my behalf if I have the same 20(11)/20(12) complications next year as I have had in recent years?
Long Story:
My wife and I have a Joint Unregistered investment account that holds stocks in several different countries. Each year we have some Foreign Income (T5 Box 15) and Foreign Taxes Paid (T5 Box 16).
Each year I receive a Warning near the end of my TurboTax Online experience to "Please verify that you are entitled to claim a 20(11) or 20(12) deduction. See help for further information". The "Help" is not helpful and since the logic and decision about this 20(11) or 20(12) deduction is entirely being done by TurboTax, and there is no way for me to change the calculations anyways, I have no reasonable way to verify this entitlement.
For the past couple of years, CRA has sent a letter asking for more details about Line 23200 (which is calculated by TurboTax, not entered by me) and the related Subsection 20(11) or 20(12) deduction.
TurboTax cannot or will not provide me with further details about how their calculations arrived at the number for Line 23200.
So, I send all of my T5 details back to CRA with a further explanation.
After a short time, they follow up with a reassessment and notice that the deduction is not allowed so additional taxes are owing.
Since even TurboTax is warning me about these calculations, I do not know how to justify these calculations with CRA.
Will Audit Defense be of value to me if this situation arises again for future tax filings? Do you have any alternate suggestions?
Thank you.
