How to report income from rented out foreign property that was inherited?

[Vikas1]

@TurboTaxDeanna how to enter this - "Foreign Tax Paid on Rental Income on FTC"?

Can you please put some screenshots here? FTC seems to be linked to "Foreign Slip" and filling of T776 doesn't show up foreign rent on FTC.

[TurboTaxDeanna]

@Vikas1

In the EasyStep you may use the find button to select your FTC form by typing Foreign tax credit. Then it is as simple as following and answering the questions and filling in the amounts.

Follow the link for a more personal Step by Step assistance by upgrading to Premier: 

https://ttlc.intuit.com/community/upgrading/help/how-do-i-upgrade-or-switch-to-a-higher-version-of-t...

• If you prefer, you may contact our support team, as they will be able to view your screen to better assess the situation. 
• Click the link below to answer the questions and be guided towards the right team. 
• Once you apply the dropdowns, you will get a phone number specific to your question (ie - support, care): I want to talk to someone. How do I phone you?-https://turbotax.community.intuit.ca/replies/3152013

[Vikas1]

Hi @TurboTaxDeanna,

Have you looked at the following post?

https://turbotax.community.intuit.ca/community/investments-rentals/discussion/re-you-will-need-to-re...

There is no question related to foreign rental income and nor the boxes to enter it are enabled in FTC forms.

Also, I already have premier edition of TT. Support had spent more than hour last week to understand the problem following which they came back and told me that FTC cannot be edited without modifying foreign slip under T-Slips. What really is missing is that foreign rental income from T776 must be included in FTC form.

[soewitas]

@Vikas1  I can do some work around by creating a dummy T slip for foreign income, but it did not come through the right line on FTC page.  No selection for Real Property Income.  I guess this is fine if we could not make it work.

[Vikas1]

@soewitas are you not going to show rental income in T776? If you put it in both places (T776 and Foreign slip) then rental income ends up getting included twice in your net income.

[soewitas]

@Vikas1 Actually, the amount of income you put in the Foreign Tax Credit section does NOT increase your taxable income.  It just allows FTC to be calculated based on ration of domestic vs. foreign income.  If you are curious you can try make the income zero on FTC section, you will see no changes to your taxable income.  The annoying thing, it does not report it in the correct line "Real Property Income".  I think TurboTax needs to fix the logic.

[Vikas1]

@soewitas What box on "Foreign tax credits" screen are you putting  your rental income in? In my case I only find "Foreign income - T4 slip box 72" enabled under "Foreign non-business income". 

[soewitas1]

@Vikas1 That is the one I am using right now.  I can't find a way to add the amount to a different line.  It's weird.  This is the first time I have to report foreign rental income and taxes so not sure if it has always been like this or this year has a flaw.  Btw, did you try adding it and notice no changes to your income because of it?  Thanks.

[Vikas1]

@soewitas I did not add it here because I don't think that this is the right place to put the amount in. "T4 slip box 72" seems to refer to box 72 on T4 form and my T4 form doesn't have entry for this. This could raise a flag during processing of returns.

[TurboImpotDeanna]

@Vikas1

@soewitas1

You may submit, the information regarding your FTC on form T2209 https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2209.html, which is completed by using the information on your T5013https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4068/guide-partner...

The amounts on form T776 are not being processed for the FTC since they are not foreign income, therefore, if you have paid taxes on foreign income, perhaps the option of using this form is not adequate for your situation.

Additional information on federal tax credit: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-re...