how to report nr4 income code 11

Oceansunshine · Post by **Oceansunshine** » Thu Apr 05, 2012 2:26 pm

Hi,

I am a Canadian (US resident) who had two mutual fund accounts with the same Canadian bank in early 2011 (I sold them all in August). One account was registered (RRSP) and the other was non-registered. I received nr4s for both accounts.

For the registered account, the nr4 (box 14) said income code 43 (RRSP - lump sum payments). Based on reading other posts, I think I have sorted out how to report this income on Form 8891 (thanks so much!). I don't think it needs to go anywhere else... (right?)

However, I haven't got a clue what to do with the non-registered account. The income code is 11 (= estate and trust income). I've done multiple searches on how to report estates/trust, but the info doesn't seem to apply. All I really need to know is what form(s)/lines I need to report the gross income (box 16) on, and whether I should report the non-resident tax withheld (box 17) anywhere (either on Canadian or US taxes or both).

Also, I see a lot of discussion about the foreign tax credit. Based on the above, do I fill one of these out? (Other than the 25% withheld, I paid no Canadian taxes and had no Canadian income in 2011).

Thanks in advance for your help!

lapfrank · Post by **lapfrank** » Mon Apr 09, 2012 12:49 pm

Hi,

I was wondering exactly the same thing. This is the first year I receive NR4 and all of them show up as "income code 11".

Did you ever figure out where to put it ? From reading online, it states it needs to go on schedule E, page 2, but I'm not sure about that.

nelsona · Post by **nelsona** » Mon Apr 09, 2012 1:10 pm

Mutual funds are PFICS according to IRS. Thsu you need to follwe the PFIC threads.

As to the type of income, you will know this from the distribution: interest, dividend or cap gains, and it should be reported accordingly.

Reason number 3,234 not to have non-registered Cdn account when living in US.

lapfrank · Post by **lapfrank** » Mon Apr 09, 2012 1:38 pm

I called my mutual funds company (which is a life insurance company) and they said that now that it is NR4, they are required to defined them as "estate and trust income" and can't tell me if they're interest, dividends, cap gains... etc.

and Nelsona, yeah, you are right. I should've sold all of them when I left. It's becoming way too much of a hassle now...

The problem is that I already did the "deemed disposition" of all my stuff... not sure what happens if I sell after that. I'll have to read that up again.

nelsona · Post by **nelsona** » Mon Apr 09, 2012 4:17 pm

Then it becomes taxable in US.

Oceansunshine · Post by **Oceansunshine** » Mon Apr 09, 2012 6:01 pm

Hi nelsona,

I've looked through a bunch of the PFIC threads now, and there are seems to be a lot of confusion on this subject! Not to mention regular rule-changing...

This is my first US tax return, as 2011 is my first year in the US, and I really wish I had sold the mutual funds before instead of after arriving.

The NR4 only lists: gross income (=$10.32) and tax withheld (=$1.55).

One of posts I read said I file 8621, but then later it said you can't do "mark-to-market" in the first year. Another post said I file 3520 if it's setup as a trust (which is what the income code 11 says). Yet another says form 1099-B.

Please help! 8621? 3520? 1099-B? Or something else?

nelsona · Post by **nelsona** » Mon Apr 09, 2012 9:20 pm

mutaul funds are considerd by IRS as PFIcs.