Foreign Tax

[sethornton51]

Under deductions, there is a section on foreign tax paid. It states that if you get dividend income from foreign countries you must list a 1099-Div from each country instead of just one inclusive of US and Foreign. Some stock accounts have multiple boxes filled(e.g. capital gains distribution, etc.) Do I just fill that info once or repeat it for each country? Also, some foreign countries show no foreign tax paid. Do I include the dividends reported from those countries with US dividends or separately. If separately, where do I indicate which country?

[pk]

@sethornton51  are you trying to enter 1099-DIV information that shows foreign taxes paid?  is the total foreign taxes paid more than the safe harbor amount of  $300  for single  ( $600 for joint filer ) ?  Are you trying to use foreign tax  as a deduction  when itemized deduction ( schedule-A ) is being used ? Or trying to get foreign tax credit using form 1116?  Is this foreign earnings and taxes  from a mutual fund or direct investment in foreign shares?

[sethornton51]

I had entered the info from the 1099-Div forms I had received. At least one account had other boxes filled in other than ordinary and qualified dividends. I later came to a section on foreign taxes paid and where I can see if I qualified for a foreign tax credit. In checking "learn more" links, an example stated that if I had paid foreign tax that I needed to report the 1099-Div in separate segments (US, and for each Foreign country tax was paid): however, in some accounts there was a mixture of countries where tax was paid, and not paid. Do I need to go back to the section for reporting 1099-Div info for each account, and separate each account that foreign tax was paid into sub-groups? If so, do I group the dividends received from foreign countries where no tax was paid with the US dividends? Is there a place to indicate the foreign country in the 1099-Div reporting section? BTW, the total foreign tax paid on 4 accounts is below $100.

[pk]

@sethornton51 , having gone through your reply--

(a) you just have to enter all the 1099-DIVs into TurboTax -- all the boxes  that are filled  in the 1099s.  This should let TurboTax determine that you have Foreign taxes. And since the total amount is  under the safe harbor amount ( $300 for single / $600 for joint filers)  this should  result in automatic credit - it may still ask you if you wanted credit or deduction -- choose credit.

(b) generally TurboTax should not be asking for  "countries" infomation but i fit does  just choose  RIC -- Regulated Investment Company or various ( I don't know if this last one still works ).

(c) you do not have to enter each country amount separately --- just the 1099-DIVs should be enough

Does this solve your issue  or am I missing something?  Can I help you  with more ?

[sethornton51]

Thank you! The answer you gave me is what I suspected, but was not sure of. The tax rules have changed almost year to year recently, and I was not sure if this was one. Thanks again.

[sethornton51]

I do have another question that you might be able to help me on. It concerns rental income that I asked over a month ago, but I got no answer. The question was this: I had expenses such as house insurance, property taxes, mortgage interest, etc., but received no rent income. Do I list that as 0.00 income or as a negative number based on fair market monthly rent times 12 months? if you don't have an answer, do you know someone who might? Thanks sethornton51

[pk]

@sethornton51 , for filling out schedule-E  ) Rental income etc., you use gross rental income as the gross income.  Thus if your property was rented or was available for rent that result in Zero rent for a period , you  still use ONLY actual received rent for the year.  This  , even without considering depreciation ,  may result in negative income ( LOSS). As a actively involved  ( and not a  realestate professional), the Passive Activity Loss is limited to 25,000 per year -- that will reduce your ordinary income and therefore  taxable income.

Does this answer your question or am i being off the mark ?

[sethornton51]

Yes, so I need to state in the income section on a rental property owned a negative number since I did not receive rental income for the year.

[pk]

@sethornton51 , sorry -- perhaps I was not clear --- you report ONLY the amounts you actually recieved.  Thus if you received zero rent for one month then you show zero ( not what you expected ) -- you are a cash basis taxpayer.

So if you received  ONLY 3 months of rent during the whole year @ 300 per month , you report your gross rental income as 900 for the year.

My apologies for not being clear

[sethornton51]

Understand thanks