How to file Foreign rental property with Foreign tax credit

[TurboTaxBrenda]

Since you are a resident of Canada and have sold a property in the US, you are required to pay taxes on it. To fulfill this requirement, you need to complete Schedule 3. Nevertheless, you can claim the foreign tax credit to reduce the impact of this tax liability.

Thank you for choosing TurboTax.

[alancharles]

Brenda,

With respect, please read my original post as you are clearly not getting the gist of my issue...I get that I am required to report and am trying to do so, however the TurboTax product does NOT allow me to do so correctly. If you don't know how to fix (or work around) the bug, please refrain from simplistic, non-productive replies. Perhaps another admin can review and advise.

Thanks

PS I am trying very hard not to be rude here, but your replies thus far have been waaaay off the mark.

[TurboTaxGinette]

Unfortunately, we are unable to help you any further in this community forum. We believe your best option is to contact our telephone support team again for further assistance, as they have the option to view your screen to help resolve the issue. To contact them, please follow this link: Contact Us. When asked if you wish to receive an email say NO then say "speak to a representative" then hold the line. If you do not reach a resolution please ask for an escalation so an investigation can be done.

​​​​​​​Thank you for choosing TurboTax.

[alancharles]

Hi @TurboTaxGinette,

Thank you for the feedback, per my original post I have ALREADY done what you suggest. At the time there was no mention of an escalation, just an indifference to my plight, even though I clearly demonstrated the 'bug'. While you state that there is nothing more to be done via the forum, I was hoping that one of the 'experts' could replicate the issue and work their magic to get that escalation as this issue obviously affects anyone in the same situation.

Is there not someone at TurboTax (Intuit) that monitors these forums that can investigate further? Otherwise, they are missing a valuable tool for insights on their product...

BTW I phoned Intuit's main corporate line and was given an 'Office of the President' email address. I have since opened a case via a link that was provided via return email.

[alancharles]

BTW, I have confirmed that @gleung 's contention that 'it used to work'. I reviewed my 2018 return which was also prepared and filed correctly with TurboTax2018. The issue appeared for me with TurboTax2021 and continues with TurboTax2023.

[TurboTaxBrenda]

Thank you for your feedback, it is much appreciated.

[sheila2024]

Hi alancharles,

I also have to input foreign rental income, as well as a foreign property sale for this year, and I have been having the same issue as you, and from what I gather, it comes down to an issue with turbotax download/cd version.

https://turbotax.community.intuit.ca/community/investments-rentals/discussion/how-to-report-income-f...

If you read this discussion, the very last post from TurboTaxHeba, it explains how in turbotax desktop version you input the amount in "Foreign Business Tax" this for the most part will solve your issues. EXCEPT that according to CRA you should be inputting this amount in "Non-Foreign Business Tax" like we all were attempting (I called and confirmed this). The additional issue is that it will not Populate form T2036 Provincial foreign tax credit as this form is depending on line 43100 Non-business foreign tax.

So if you enter the amount in "foreign business tax" as suggested above and you do not receive the full credit amount of the taxes you paid, then you lose the remainder. Whereas if you input it in non-business foreign tax then you will get the remaining credit in your provincial foreign tax credit (at least this is true for me in Ontario, not sure about other provinces).

The fix? call turbotax to get a refund on the desktop version, and switch to the online version where it will let you report things correctly.  The online version you are able to complete the foreign tax credit T2209 properly without adding the additional income to your return. So you can enter the rental information on T776, as well as report the capital gains on schedule 3 like you are supposed to.

Hope this helps.

[alancharles]

@sheila2024 , thank you for your further validation of my issue. 

Per the posting of 'Vikas1' in the other thread you reference, it is also my contention that all versions of TurboTax should behave the same to ensure that EVERYONE'S tax returns are filed CORRECTLY. The CRA's requirements do not change depending on which version of a tax software program one uses.

FWIW, my case with the 'Office of the President' has been escalated and they are currently investigating the issue. Will look to post back here when there is a resolution.

[lphillips1000]

I am just curious if this issue has been resolved. I spoke with someone who works in an accounting firm that uses a more sophisticated tax software, and in that software, when you enter a capital gain on schedule 3, there is an option to indicate if it is a foreign property that has been sold. Once you tick the box to indicate that it is a foreign property sale, then a box opens up where you can enter the foreign tax paid. And then everything flows through to the foreign tax credit forms. This seems like a simple solution - don't know if Turbotax has thought of this.

[alancharles]

Hi @lphillips1000 

Not resolved yet, however your proposed solution makes sense as that is exactly what is missing, the ability to detail a foreign capital gain on Schedule 3 (as required by CRA) while claiming a Foreign Tax Credit.

Hopefully a fix will soon be presented by TurboTax.