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Question

How to enter canadian income from capital gains tax

Forum|Forum|2 years ago
February 15, 2024
2 replies
0 views

i paid canadian capital gains in 2022. Now i received a refund in 2023

TurboTax Online

Employee

I would keep it simple and enter it as other income with a description.

To enter:

go to personal income,
scroll to the bottom to miscellaneous, 1099-A, 1099-C income,
start,
scroll to the bottom again,
other reportable income,
start.
other taxable income, yes
enter amount and description.

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in 2022 did you take the amount paid as a foreign tax credit on your US return.

if so

If the foreign income taxes you claimed as a credit are refunded to you or otherwise reduced, you must file an amended return on Form 1040-X reporting the reduced foreign tax credit no later than the due date (with extensions) of your return for the year in which the foreign taxes were refunded or reduced.

Topic no. 856, Foreign tax credit | Internal Revenue Service

www.irs.gov/taxtopics/tc856

lwda834222Author

I paid capital gains in 2022 to Canada.

95k. I then filed 1116 in USA. And got the credit. Then in 2023 Canada sent me 30k as a refund from the capital gains tax paid. I guess I didn't understand that I should amend 2022 because that refund came in 2023

The refund of taxes paid is not income, so you don't report it in 2023. You need to amend the 2022 return and reduce the amount of foreign taxes paid on which you received a foreign tax credit, as mentioned by @Mike9241

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