Report Foreign Dividends Step-by-Step: RIC or other

Forum|Forum|2 years ago
March 7, 2024
2 replies
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When filling in the information from my 1099-DIV, I reported $267.14 in foreign taxes paid. Two steps later, I am to report the portion of the dividends and distributions that was from a foreign country. I have that number, of course, from my 1099-DIV summary. However, I am required to check whether those foreign dividends are from a Mutual Fund/Regulated Investment Company (RIC) or other. I cannot choose both.

In my situation, some of the dividends came from RICs (mutual funds) and some came from regular securities. What should I check? This might affect how the numbers are reflected on the Form 1116 if i wish to claim the foreign tax credit.

Thank you in advance.

DaveF1006

Yes. It doesn't give you much of a choice when you answer this question. I would suggest selecting RIC since some of the dividends came from RIC.

This isn't a critical component in your return and won't raise a red flag. The amount reported will not generate a Form 1116 because it is less than the $300 reporting threshold required to be reported on Form 1116.

If a Form 1116 would have be generated in the return, you would have been able to allocate portions between RIC and the other securities amount but since a Form 1116 is not generated, separating the two amounts is irrelevant.

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paulinus49Author

Thank you for your reply. I do in fact have more foreign taxes paid, but they were to specific countries from another brokerage account putting me over the $300 limit. Which, of course, only complicates matters. If it was only the one account, I agree with your analysis. My hope is that the TT developers will tweak the program appropriately if enough users complain about confusing steps. Thanks again.

DaveF1006

I noticed in the Foreign Tax Credit section that it mentions to select RIC if any income was received from a mutual fund or other Regulated investment company. This indicates that a further breakdown is not necessary to be reported on your return.

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neet

I have $914.38 in foreign tax paid. There is no place anywhere in my report that shows foreign dividends received. What do I do? TurboTax is not letting go further.

ThomasM125

All or a portion of the dividends reported in box 1 on your Form 1099-DIV would likely be the foreign income associated with the foreign taxes reported in box 7. If there is not information included with your Form 1099-DIV that identifies the foreign income, you would have to ask the issuer for it. Also, if you know the dividends are from ownership in a foreign entity, that would be a clue as to how much of them represents foreign income.

@neet

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