non-residents

I came across an interesting Tax Court case this evening … or perhaps more interesting to some than to others. In a nutshell the case revolved around whether a U.S. couple living in Canada were required to pay AMT (alternative minimum tax) on their income earned in Canada. Under the standard tax calculation method, the U.S. taxes owing were offset by the Canadian taxes paid. But under the AMT calculation, the Canadian tax credit was not allowed. I thought that the bilateral tax treaty would rule and the tax credit would be allowed, but much to my surprise, the Tax Court agreed with the IRS!