Hello!
Spouse and I have been filing jointly in the US. Last year one of us had a capital loss, let's say 10K and this year, the other person had a capital gain, let's again say 10K.
Capital losses carry forward. So, the 10K loss from the prior year offsets the 10K gain from the current year. This is if we file jointly in the US.
Now, we are in Canada and are considered as residents in Canada for tax purpose (and also have to file in the US because of substantial presence there) for the current tax year.
Since in Canada, the taxes are filed separately, will the 10K gain made this year by one of us be taxed completely at marginal tax rate (without considering the fact that we had filed our taxes in US, even though we offset it) OR Can the filing in US be used for a foreign tax credit here in Canada in this scenario (with us only having to pay taxes on the amount that wasn't paid as tax as Canada taxes are higher).
Thanks!
Spouse and I have been filing jointly in the US. Last year one of us had a capital loss, let's say 10K and this year, the other person had a capital gain, let's again say 10K.
Capital losses carry forward. So, the 10K loss from the prior year offsets the 10K gain from the current year. This is if we file jointly in the US.
Now, we are in Canada and are considered as residents in Canada for tax purpose (and also have to file in the US because of substantial presence there) for the current tax year.
Since in Canada, the taxes are filed separately, will the 10K gain made this year by one of us be taxed completely at marginal tax rate (without considering the fact that we had filed our taxes in US, even though we offset it) OR Can the filing in US be used for a foreign tax credit here in Canada in this scenario (with us only having to pay taxes on the amount that wasn't paid as tax as Canada taxes are higher).
Thanks!