Level 2

Foreign Dividend income

Forum|Forum|6 years ago
April 30, 2020
4 replies
24 views

Do I put the Dividend income on Sch B do I need to filled out another form also. The amount is around 10, 000 US

Russ

This topic has been closed for replies.

sjrcpa

Level 15

Yes it gets reported on Sch B.

FBAR and/or 8938 may be required.

The more I know the more I don’t know.

R

Russ 12Author

Level 2

What is the determine if we need the 8339 or FBAR ?

sjrcpa

Level 15

Read the instructions for each form.

The more I know the more I don’t know.

George4Tacks

Level 15

Be sure to populate the questions at the bottom of Schedule B about foreign income. The HOW depends on your software, which you should always choose before posting a question.

Answers are easy. Questions are hard!

itonewbie

Level 15

@George4Tacks wrote:
Be sure to populate the questions at the bottom of Schedule B about foreign income. The HOW depends on your software, which you should always choose before posting a question.

Agree, if the taxpayer has foreign income tax paid on passive income.

---------------------------------------------------------------------------------Still an AllStar

itonewbie

Level 15

If the dividend is from foreign mutual funds, REIT, etc., your client may be subject to PFIC and have a F.8621 reporting requirement, which could get costly in terms of compliance burden, tax regime, and potential penalties for incompliance, not to mention that delinquent filing will toll the SOL on the entire return.

---------------------------------------------------------------------------------Still an AllStar

itonewbie

Level 15

There are also specific requirements that determine whether foreign dividends can be treated as qualified dividends for US tax purposes.

---------------------------------------------------------------------------------Still an AllStar

R

Russ 12Author

Level 2

Is there a video on this topic so I can understand what I am doing if so can you please give me the link to it please?

Russ

itonewbie

Level 15

It all depends on how complex your client's setup is. It may be as simple as these dividends coming from US-listed shares/ADR and being reported on a 1099-DIV.

FBAR and FATCA (Form 8938) are relative straight forward. You should be able to understand the requirements by reading the filing instructions and IRS pubs.

For more complex issues, there is not one single source you can go to. You will need to piece together many different code sections, regulations, Rev. Proc., etc. CPE courses in this area also tend not to be comprehensive, partly because the law is expansive - and part of which actually lacks clear IRS guidance.

Basic questions are: Is the dividend from a CFC? If so, is your client a 10% shareholder, officer or director? If not, are these publicly traded securities? If so, are these foreign mutual funds, REIT, or similar types of investments? Are these securities listed on the US exchange or are these ADR? If not, in which country were these shares issued? Are these shares held in a trading account overseas? Did your client reside in a foreign country during 2019? Did you find out what the maximum aggregate balance and value of your client's foreign bank and financial accounts as well as foreign financial assets were?

---------------------------------------------------------------------------------Still an AllStar

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