Recording CAD Dividends & Interest on US Return

Willyt · Post by **Willyt** » Fri Apr 05, 2013 6:23 pm

Given I only received T5's for my interest & dividends, I'm confused which amounts to record and where.

INTEREST - This amount is clear as there is only one figure but entering $480 interest on a 1099-INT Box 1 generates 15% reduction. If this is correct can I offset this with a credit?

DIVIDEND - The T5 has "Actual, Taxable, & Tax Credit". These do not correlate directly to a 1099 and placing the Taxable in Box 1a of a 1099-DIV generates a 15% reduction. Again, can this be offset with a credit?

Any suggestions?

nelsona · Post by **nelsona** » Fri Apr 05, 2013 9:23 pm

Are you a US or Canadian resident?

Willyt · Post by **Willyt** » Fri Apr 05, 2013 11:23 pm

Sorry, US resident as of 11/16/2012

nelsona · Post by **nelsona** » Sat Apr 06, 2013 8:31 am

So it would appear rhat you have not informed your Cdn broker that that your are US resident. othewise he would be withholding Cdn NR tax on your dividends. Please correct this ASAP.

You will need to first prepare your Cdn departure return, reporting all income upto your departure date, including ONLY the interst an dividends that were paid to before then. The interst and dividends you receve after your departure date do not appear on your Cdn return. You will also have departure tax on your investments.

You will need to separately send a check to CRA for 15% of the dividends you got after you left, wit ha letter explaing your oversight.

Assuming you are filing a 1040 (I would question why, since you moved so late in year and probably should just file a 1040NR, unless you are or married a US citizen).

Finally, to your question, you would take credit for the Cdn tax you paid on your Cdn return, prorated by the amount of interest you report. Same for dividends; you would use actual dividends on your US return.

nquery · Post by **nquery** » Sat Apr 06, 2013 11:49 am

Could he not just avoid the hassle of splitting the canadian interest and dividends into two buckets (resident and then nr withholding) by filing a section 217 and getting taxed at regular rates on the whole pile? Mind you, it might result in more effective tax in which case the section 217 would not be valid ...

Willyt · Post by **Willyt** » Sat Apr 06, 2013 11:56 am

Yes, I had put in a change of address with my broker but apparently I needed to be more explicit.

Yes I did marry a US citizen and it works very much in our favour to file jointly on a 1040.

Just for clarification, on my 1040 I would only declare that portion of interest and dividends I received after becoming a US resident? All interest and dividends prior to my move are declared on my CAD return?

Thanks very much!

nelsona · Post by **nelsona** » Sat Apr 06, 2013 2:09 pm

No, 217 returns don't cover interest and dividends. Non-residnts MUST pay NR tax on dividends, no more, no less.

I have outlined how he should do it.

No, for US you report everything. For canada you report only before move income on your return, and then send a separate check for 15% of the dividends. NRs pay no tax on interest in canada.

Willyt · Post by **Willyt** » Sat Mar 01, 2014 8:33 pm

In doing my 2013 taxes it brought me back to this. I believe I got my 2012 returns correct with perhaps a misunderstanding on the U.S. return. Was I able to claim the 15% [quote][i]You will need to separately send a check to CRA for 15% of the dividends you got after you left[/i][/quote] on my 1099-DIV in Box 6 as Foreign Tax Paid and if so can I simply go back and send in an ammended 2012 return with the modified 1099-DIV? Or is there something more I am missing?

nelsona · Post by **nelsona** » Sun Mar 02, 2014 7:36 pm

First off, you do not have a 1099-INT. You merely used the form to get the income on your 1040 software.

You had to claim any tax on form 1116.

Willyt · Post by **Willyt** » Sun Mar 02, 2014 8:51 pm

Sorry, it was not my 1099-DIV, it was a form. So if I did not claim tax on a form 1116 can I file an ammended return now for 2012 with a completed 1116?

Also, based on my 2013 1099-DIV broker form, all ordinary dividends were also qualified dividends. Given I did not receive a 1099-DIV broker form for 2012 due to my failure of advising my status change, and the stock for both years is the same, can I also claim on an ammended 2012 1099-DIV the full amount of qualified dividends?

nelsona · Post by **nelsona** » Mon Mar 03, 2014 9:50 am

Sure/

Willyt · Post by **Willyt** » Tue Mar 04, 2014 12:13 pm

Thank you for your help!

mmogoogle · Post by **mmogoogle** » Fri Mar 07, 2014 4:17 am

You will need to separately send a check to CRA for 15% of the dividends you got after you left, wit ha letter explaing your oversight.All interest and dividends prior to my move are declared on my CAD return?

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Recording CAD Dividends & Interest on US Return

Recording CAD Dividends & Interest on US Return

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