At least for me when I get the dividend the Canadian taxes are already deducted. Then when you file you indicate the foreign tax amount you paid which is then deducted from your US tax burden. Whether you pay both dependends on your tax bracket, as 15% is deducted for Canada tax.
For those of you who would rather take advise from a stranger on a discussion board than find the facts I am submitting FROM THE COMPANY WEBSITE:
Pursuant to the Canada – U.S. Tax Treaty, the Trust’s and Penn West’s distributions paid to
residents of the United States are subject to a 15% withholding tax on 100% of the gross
Based on an opinion we have received from our U.S. tax advisors, for units held in taxable
accounts, we believe the full amount of Canadian withholding taxes applied to the Trust’s and
Penn West’s distributions should be creditable for U.S. tax purposes in the taxation year in which
it is applied. Where units or shares are held in a tax-deferred account (e.g., an IRA account), we
believe no portion of the withholding tax is creditable.
Canadian withholding taxes that have been withheld from your distributions are included in box 6
of Form 1099-DIV and should be reported on line 47 of the U.S. Form 1040 and if required, on
Form 1116 “Foreign Tax Credit (Individual, Estate or Trust)”. Information regarding the amount of
Canadian tax withheld from 2011 distributions should be available through your broker or other
intermediary and is not available from the Trust and Penn West.