In filing out this form somewhere I read in the instructions that Corporate profits are not to be included as reportable income on this form. In my example I am a PR in canada, US citizen, I have a canadian corp and take a salary of $75000, I also take dividends each year of say $20,000; I am wondering if those Corp dividends need to be reported? or am I trying to make the wording work to my benefit!
Cheers
Form 2555
Moderator: Mark T Serbinski CA CPA
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by gdcinbc</i>
In filing out this form somewhere I read in the instructions that Corporate profits are not to be included as reportable income on this form. In my example I am a PR in canada, US citizen, I have a canadian corp and take a salary of $75000, I also take dividends each year of say $20,000; I am wondering if those Corp dividends need to be reported? or am I trying to make the wording work to my benefit!
Cheers
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
As a US citizen, you must report 100% of your world income on your 1040. What the 2555 instructions are saying is that your dividends do not qualify for the FEIE. Instead, you will have to claim a FTC on the 1040 for the Canadian tax paid on the dividends. Note, for US purposes, you only report the "cash" dividend, not the "grossed up dividend" that goes on your T1 return.
Also, be sure to file a Form 5471 with your 1040 to report your ownership of a Controlled Foreign Corp, i.e. your Canadian corp.
Regards,
CRH
In filing out this form somewhere I read in the instructions that Corporate profits are not to be included as reportable income on this form. In my example I am a PR in canada, US citizen, I have a canadian corp and take a salary of $75000, I also take dividends each year of say $20,000; I am wondering if those Corp dividends need to be reported? or am I trying to make the wording work to my benefit!
Cheers
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
As a US citizen, you must report 100% of your world income on your 1040. What the 2555 instructions are saying is that your dividends do not qualify for the FEIE. Instead, you will have to claim a FTC on the 1040 for the Canadian tax paid on the dividends. Note, for US purposes, you only report the "cash" dividend, not the "grossed up dividend" that goes on your T1 return.
Also, be sure to file a Form 5471 with your 1040 to report your ownership of a Controlled Foreign Corp, i.e. your Canadian corp.
Regards,
CRH