Swedish inkomsdeklaration -- declare schablonintäkter on your US taxes?

[karenkailua]

I'm American, husband is Swedish and US Greencard holder (permanent resident). His Swedish inkomsdeklaration includes schablonintäkter, which I understand to be based on a small percentage of the value of funds/shares (in his Swedish bank). It's my understanding that Sweden treats this as "income" (imputed/ascribed) and it is taxed at 32%.

QUESTION: do I need to declare this "income" and the tax paid on our US taxes? Where/how? On a substitute 1099-DIV so I can also declare the taxes paid? 

The amounts are significant -- $2000 schablon and $650 tax

[ColeenD3]

Yes, if you're a U.S. citizen or resident. You'll need to report all of your income, whether it was earned in the U.S. or abroad.

Here's how to enter your foreign income:

1. Sign in to TurboTax and open or continue your return.
2. Search for foreign income.
3. Select the Jump to link in the search results.
4. Answer Yes to Did You Make Any Money Outside the United States? and follow the on-screen instructions.

If you lived and worked in a foreign country, you might qualify for the foreign income exclusion. We'll ask questions to see if you qualify after you've entered your foreign income.

To enter foreign taxes paid, please follow these steps:
 

1. Click on Federal Taxes > Deductions & Credits [In TT Home & Biz:  Personal > Deductions & Credits > I'll choose what I work on].
2. Scroll down to the Estimates and Other Taxes Paid section.
3. Click on the box next to Foreign Taxes.  (Screenshot #4)
4. On the Foreign Tax Credit screen, click on the Yes box.
5. Enter the information requested on the screens.

[karenkailua]

Unfortunately, this is a general answer that does not answer my question. Sweden treats this valuation of assets my Swedish husband owns as income, which the US does not, so is it really income for US taxes? If the answer is yes, I have no problem declaring it, but what kind of income is it ? Is it interest? Dividends? Investment income? (Ie which substitute 1099 should I put it on?)  Or is it miscellaneous/other income? 

[ColeenD3]

You must report your total worldwide income subject to tax. If the US specifically excludes it, don't report it.

Report it as other income and list the type.

• Federal Taxes ->
• Wages & Income -> 
• I'll choose what I work on -> scroll to the bottom and under 
• Less Common Income select Start (or Update) for 
• Miscellaneous Income
• Other reportable income and you can enter your own description(s) and amount(s)

[karenkailua]

Hmmm... I do understand that I must report worldwide income that is subject to tax. But I don't think this is actually income. I said the the Swedish system "treats it as income" but it's only for the purpose of figuring a tax. They apply a formula to the VALUE of your funds/shares to assess a tax. (It seems similar to property tax, wherein your local tax authority assesses property tax based on the value of your home. You pay that tax but you don't declare the value of your home as income.)

So, I think I should be able to declare that tax paid but not declare income because it's assets we already own, it's not income. Is there a way to do that?

[Vanessa A]

According to the IRS, yes, you may be able to claim a credit for taxes paid as a mutual fund shareholder as this is a foreign tax that qualifies for the foreign tax credit. 

You will enter the income and credit in the foreign income section of TurboTax by selecting the following:

• Federal
• Income and Wages
• Show More next to Interest and Dividends
• Start next to Foreign Accounts, 1099-OID