I am working through my US tax forms that I am filing as a resident for tax purposes for the first time, My issue is that I have dividend income from Canadian REITs from which my broker has correctly withheld 15%. I know I can take a foreign tax credit via form 1116.
1) How do I now take the treaty position to ensure that the qualified dividends indicated in 1099-DIV (almost all from Canadian REITs) are taxed only at 15% and not at higher rates?
2) If I take a treaty position on dividends, what numbers do I enter in form 1040 and/or schedule B?
In sum, I am stumped over how to fill out form 1040 etc. so as to ensure that my Canadian source dividends are only taxed at the treaty rate.
Thanks all.
Treaty position on dividends
Moderator: Mark T Serbinski CA CPA
1) US residents don't get a special treaty rate for US taxes. They get a special rate for Cdn taxes, which you did: 15%.
2) You don't have atreaty position. You enter the income on 1040 schedule B, and it will go over to 1040. You can take credit for the 15% that was paid to Canada on 1116. That's it.
Only US tax filers living in Canada get a special treaty break -- if they need it -- on their 1040.
2) You don't have atreaty position. You enter the income on 1040 schedule B, and it will go over to 1040. You can take credit for the 15% that was paid to Canada on 1116. That's it.
Only US tax filers living in Canada get a special treaty break -- if they need it -- on their 1040.
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