Foreign taxes paid interview question on foreign source qual dividends and LTCG

[cmoore5026]

In the Deductions/Foreign Taxes section of the interview, there is a page that asks "Any foreign source qualified dividends or long term capital gains?".  Then it wants you to enter the number for "foreign qualified dividends and l.t. capital gains".  Question 1:  Does the term "foreign qualified" apply only to "qualified dividends" or does "foreign qualified" also apply to the second half of the statement which is "l.t. capital gains".  In other words, should I include 100% of the LTCG on box 2 a of 1099-DIV or only the % that applies to FOREIGN LTCG? 

Question 2:  My mutual fund company provided a % for foreign source income but did not provide a separate % for foreign LTCG so I would not know how to calculate foreign LTCG if in fact I need to report only FOREIGN LTCG.  Any advice is appreciated.

[Mike9241]

read it this way

"Any foreign source qualified dividends or foreign source long term capital gains?".

ask the mutual fund what that % represents. could be both or only dividends 

[cmoore5026]

I asked mutual fund company and the rep could not answer that question. 

[cmoore5026]

Does anyone else have any input or ideas?

[VanEric]

I am having the same issue, and my investment firm did not know the answer to that question.

[cmoore5026]

Question 1:  Does the term "foreign qualified" apply only to "qualified dividends" or does "foreign qualified" also apply to the second half of the statement which is "l.t. capital gains"?

[JulieS]

Yes, this question is asking for your foreign capital gains distributions and your net long term foreign capital gain or loss. 

[cmoore5026]

In case this helps any other reader, a Texas CPA told me the following regarding my question when posted to a CPA community board:

Question 1:  Does the term "foreign qualified" apply only to "qualified dividends" or does "foreign qualified" also apply to the second half of the statement which is "l.t. capital gains"

Answer:  If your client is a US citizen, general rule is that the capital gains are sourced to the US.  IRC 865(a)(1).  "Stock" is not an intangible for these purposes - see definition of intangible in IRC 865(d)(2).  Thus, absent a treaty permitting re-sourcing of that gain, this income would not help to release any FTCs.  Note that foreign qualified dividends are qualified generally only if the source country has a treaty w the US, or if the corp is incorporated in a US-possession, or if the foreign payor corp is publicly traded in the US.

Question 2:  My mutual fund company provided a % for foreign source income but did not provide a separate % for foreign LTCG so I would not know how to calculate foreign LTCG if in fact I need to report FOREIGN LTCG.

Answer:  See above reply.