@bander , agreeing with @investng engineer that you should have received 1042 rather than a 1099 and also agreeing with your commentary on the subject, lets clarify :
(a) Mutual funds or similar with "foreign" earnings ( i.e. foreign from the perspective of a US investor / entity) reports those foreign sourced earnings ( for US taxes ) and "foreign " taxes paid thereon. Such "foreign" earnings are generally reported as percentage i.e. the fund has x% of its total investment in country x and so on and so forth. Similarly x% of the total foreign taxes paid has been paid to country x. Details of these are generally available in the back pages of consolidated brokers statement or directly from the broker/ manager of the fund.
(b) a US person owning such funds is taxed by the US on both the US sourced income and on the foreign sourced income ( world income ) and given credit for foreign taxes paid on the foreign income. A Non US person is taxed by the US ONLY on US sourced / connected income --- he/she is not taxed by the US on the foreign portion of the total income nor given credit for the taxes paid to a foreign country. -- therefore the need for the 1042-S
(c) a Non-US person has the additional burden of the existing tax treaties between US and his/her home country and the those between the home country and the "foreign " incomes & taxes paid thereon. It is quite complicated ( in general).
Does this make sense and/or do you need more help ?
pk
