Australian company dividend - qualified or not?

[Kofian]

I understand that to be qualified, 1 of 3 conditions must be met. My question is on the condition: company incorporated in a US possession.

Can the parent company have a subsidiary that’s incorporated in the US and that’s sufficient to meet the condition? 

[Bsch4477]

The IRS decides whether a dividend is qualified and it has to with treaties as well as other considerations. 

[Kofian]

Australia has a treaty with the US. If I need to check with the US Treasury if my specific company is covered, where would I look? I believe from other answers, the key outstanding question is if the company subdivision incorporated in US is sufficient (parent is incorporated in Australia). The company is not traded on a US exchange

[BrittanyS]

Golding Lawyers provide the following information on foreign dividends, "Not all foreign dividends are qualified. In order for a foreign dividend to be qualified, it has to meet certain threshold requirements to assess whether it meets the minimum basic requirements for qualified dividend status.

Generally, the foreign dividend must meet any of the following requirements (brief summary):

• The Corporation is incorporated in a U.S. Possession
• The Corporation is eligible for benefits by way of a U.S. Income Tax Treaty
• If the stock is readily tradable on an established securities market in the U.S. (or a National Securities Exchange registered under Section Six of the Securities Exchange Act of 1934 or NASDAQ Stock Market.)"

See the link below for more information:

• Foreign Dividends

[timviega23]

I have the same issue; my client has investments in Australia where he is from but is a U.S. citizen and files in the U.S. He generates quite a bit of dividends so I would like to know if these dividends are qualified for tax purposes.

Would his financial advisor know?

[Kofian]

I ended up reaching our to the Australian compensation manager. Their advisor said it appeared my employer met the qualified critieria, but I would need to check with my own tax advisor.

[VictoriaD75]

BrittanyS stated the qualifications for foreign qualified dividends in the thread above. For specific guidance on a dividend from your investments, it is best to reach out to your financial advisor to determine whether or not they are qualified if you are unsure from the instructions posted. 

Qualified dividends are taxable at favorable tax rates in comparison to ordinary dividends, which are tax at your ordinary income rate. All dividends are ordinary, but not all dividends are qualified. You will see the total of your dividends reported on line 3a of the Form 1040. Those that are taxed at qualified dividend rates will be separated out on line 3b.