Dividends, non-dividends, and qualified dividends

[nelsona]

There has been a lot of dicussion on what constitutes a qual;ified dividend in IRS terms, for Cdn corporate dividends and distributions from Cdn mutual funds.

So, lets discuss:
Here is my take, feel free to elaborate disagree, clarify, whatever.

Mutual fund (MF)distributions:
MF's distribute taxable income in three ways: interest, cap gains and dividends. When reporting these distributions on your Cdn return, the MF company issues T slipd which allot the distributions to whichever 'bucket' they belong in.
When reporting to the IRS, one has to follw the same rules. If this were a US MF, the fundco would issue the requisite 1099 and youwould report this accordingly.
So, not all MF distributions are dividends, and at best, only true dividends would qualify for any special treatment on your 1040.
Also, cap gains distributions from Cdn MF are NOT considered cap gains, since the IRS cannot verify that the MF has fiollwed their accepted definitions, so cap gains distributions are reported as ordinary income on 1040.
PFIC dividends are not eligible for qualified status, so that is out.
So, in reality, most MF distributions from canada are reported as ordinary income. At best only true dividend distributions are dividends, and may or may not be 'qualified' for IRS purposes.

[Filo]

IRS Publication 17, at

http://www.irs.gov/publications/p17/ch08.html

says this:

Money Market Funds

Report amounts you receive from money market funds as dividend income. Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest.

--------------

Based on that, as USC resident in Canada, I have been listing Canadian money market income as Dividends. But from what you've said, I shouldn't be doing that? On what line on form 1040 do I put Canadian money market fund income?

[onlynewsky]

While its a pretty damp and dreary day listed here in Freeport right now, the weather didnt maintain this aged salt from browsing the sea Luggage store. Our newest pal, and her captain, sail their 36 Pearson up from Padanaram Harbor, MA each individual summertime and also have been [url=http://www.longchampoutletsite.com/]longchamp[/url] visiting the coastline of Maine with their 13 year-old black lab, Max, for your final 13 a long time. She experienced seen about the [url=http://www.longchampoutletsite.com/long ... -c-16.html]longchamp victoire[/url] Sea Bags retail store in her hometown (we adore how information spreads like that). She made the decision to return consider the spot exactly where we would at some point convert their outdated sails 1 day into anything [url=http://www.longchampoutletsite.com/]longchamp uk[/url] practical that also can help the earth as well. Up to they love the beautiful state of Maine, she enjoys her new Sea Bag that tells her retirement story equally as significantly.
Tags: eco-friendly freeport Produced in Maine maine sails sea baggage looking vacation

[onlynewsky]

[quote="onlynewsky"]While its a pretty damp and dreary day listed here in Freeport right now, the weather didnt maintain this aged salt from browsing the sea Luggage store. Our newest pal, and her captain, sail their 36 Pearson up from Padanaram Harbor, MA each individual summertime and also have been http://www.longchampoutletsite.com longchamp visiting the coastline of Maine with their 13 year-old black lab, Max, for your final 13 a long time. She experienced seen about the http://www.longchampoutletsite.com/long ... -c-16.html]longchamp victoire[/url] Sea Bags retail store in her hometown (we adore how information spreads like that). She made the decision to return consider the spot exactly where we would at some point convert their outdated sails 1 day into anything http://www.longchampoutletsite.com longchamp uk practical that also can help the earth as well. Up to they love the beautiful state of Maine, she enjoys her new Sea Bag that tells her retirement story equally as significantly.
Tags: eco-friendly freeport Produced in Maine maine sails sea baggage looking vacation[/quote]

[testone]

Nelson, here is my take.

“MF's distribute taxable income in three ways: interest, cap gains and dividends. When reporting these distributions on your Cdn return, the MF company issues T slipd which allot the distributions to whichever 'bucket' they belong in.â€￾

Okay so far. I assume that this is the Canadian tax treatment.

“When reporting to the IRS, one has to follow the same rules. If this were a US MF, the fundco would issue the requisite 1099 and you would report this accordingly.â€￾

I disagree. U.S. mutual funds are regulated investment companies (“RICsâ€￾), and are treated specially for U.S. tax purposes. Foreign mutual funds are not RICs and are not subject to the same special rules as RICs.

Foreign mutual funds will almost always be treated as corporations for U.S. tax purposes, even if structured as trusts. Foreign mutual funds will also almost always be passive foreign investment companies (“PFICsâ€￾).

Distributions from corporations out of earnings and profits that are not subject to the special RIC rules are dividends. Dividend distributions from PFICs cannot be qualified dividend income. Ergo, distributions from foreign mutual funds cannot be qualified dividend income.

[nelsona]

That is eactly what I said.

You are disagreeing that "If this were a US MF, the fundco would issue the requisite 1099 and you would report this accordingly"?

How is this wrong?

Everything else I said after that was in support of NO Cdn MF distributions being qualified, so we agree 100%.

[testone]

Sorry. i misunderstood. We are in agreement.