If you are a US citizen or resident alien, you will need to include this UK dividend (In USD) on your US income tax return. (Nonresident aliens filing a Form 1040NR are only required to report US source income and therefore would not report foreign source dividend income on a 1040NR.)
You will report the cash portion of your dividend in USD as though you received a 1099-DIV for this transaction.
The Internal Revenue Service has no official exchange rate. In general, use the exchange rate prevailing (i.e., the spot rate) when you received the income. Please refer to the following IRS links for more information about Foreign Currency and Currency Exchange Rates and Yearly Average Currency Exchange Rates
To enter this dividend income in TurboTax Online (for TurboTax Online sign-in, click Here , then select "Take Me to My Return") or Desktop, please follow these steps:
- Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
- Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
- Next click on “I’ll choose what I work on” (jump to full list or see more income)
- Scroll down the screen until to come to the section “Interest and Dividends”
- Choose “ Dividends on 1099-DIV” and select “start’
- Select "I'll type it in myself"
- Enter the name of the brokerage firm/foreign corporation and the amount (in USD) in box 1a (Usually foreign dividends are not considered qualified dividends).
- Check the box "My form has info in more than just box 1 (this is uncommon)".
- Enter any Foreign taxes paid in Box 6.