Since you never posted, consider my advice as "a break".
Otherwise, you will still look [:o)] the second time you post on a forum.[:)]
<i>nelsona non grata... and non pro</i>
Form 8891 questions here please!!!!
Moderator: Mark T Serbinski CA CPA
Hi, nelsona,
About the spousal exemption we were discussing earlier this month, I thought you might be interested in this--
<i>Source:</i>
<i>http://www.irs.gov/publications/p54/ar0 ... d0e8139</i>
<b>Exemptions and
Dependency Allowances </b>
<i>1) I am a U.S. citizen married to a nonresident alien who has no income from U.S. sources. Can I claim an exemption for my spouse on my U.S. tax return?
Yes. If you file a joint return, you can claim an exemption for your nonresident alien spouse. If you do not file a joint return, you can claim an exemption for your nonresident alien spouse only if your spouse has no income from sources within the United States and is not the dependent of another U.S. taxpayer.</i>
I thought the clarification "from U.S. sources" was helpful.
Thanks again for all your help.
About the spousal exemption we were discussing earlier this month, I thought you might be interested in this--
<i>Source:</i>
<i>http://www.irs.gov/publications/p54/ar0 ... d0e8139</i>
<b>Exemptions and
Dependency Allowances </b>
<i>1) I am a U.S. citizen married to a nonresident alien who has no income from U.S. sources. Can I claim an exemption for my spouse on my U.S. tax return?
Yes. If you file a joint return, you can claim an exemption for your nonresident alien spouse. If you do not file a joint return, you can claim an exemption for your nonresident alien spouse only if your spouse has no income from sources within the United States and is not the dependent of another U.S. taxpayer.</i>
I thought the clarification "from U.S. sources" was helpful.
Thanks again for all your help.
OK, nelsona, despite the rawther ironic tone, your point that "from U.S. sources" is open to interpretation is well made.
For us, I hope that it means that if I hold an investment in Canada that, in turn, has holdings in the U.S., the fact that the investment is in a <i>Canadian</i> bank, mutual fund, REIT, etc. will make it a Canadian investment for these purposes, i.e. not "from U.S. sources."
Have you come across anything which defines the rule more completely?
For us, I hope that it means that if I hold an investment in Canada that, in turn, has holdings in the U.S., the fact that the investment is in a <i>Canadian</i> bank, mutual fund, REIT, etc. will make it a Canadian investment for these purposes, i.e. not "from U.S. sources."
Have you come across anything which defines the rule more completely?
No, no, I wasn't being ironic.
The term US-source income is VERY clear. Income 'for US purposes', which is mentionned in several other places, is not.
If your husband were to have any holdings physically in the US, and those generated income, these would be US-sourced and would prevent you from using his exemption. If your husband were to hold individual US stocks for example, and get dividends (not merely cap gains) from these, or buy US real estate that generated income, that might be a different story
But holding Cdn mutual funds etc that held US investemnts, would not be US-sourced, as the funds holding these are considered 'Cdn' entities.
A simpler way to look at it would be: If he was to look at a 1040NR (which only requires reporting of US-source income), would the result be '0'? If so, then you are free to use his exemption. Otherwise, he should be filing a 1040NR and using his own exemption.
<i>nelsona non grata... and non pro</i>
The term US-source income is VERY clear. Income 'for US purposes', which is mentionned in several other places, is not.
If your husband were to have any holdings physically in the US, and those generated income, these would be US-sourced and would prevent you from using his exemption. If your husband were to hold individual US stocks for example, and get dividends (not merely cap gains) from these, or buy US real estate that generated income, that might be a different story
But holding Cdn mutual funds etc that held US investemnts, would not be US-sourced, as the funds holding these are considered 'Cdn' entities.
A simpler way to look at it would be: If he was to look at a 1040NR (which only requires reporting of US-source income), would the result be '0'? If so, then you are free to use his exemption. Otherwise, he should be filing a 1040NR and using his own exemption.
<i>nelsona non grata... and non pro</i>
Hi, Thank you <i>so much!!</i>
I didn't understand until you gave the additional explanation and example. I can't tell you how much I appreciate this!
Maybe(I hope you don't mind if I get greedy)[:I] you could answer another question? In another area of the forum, I asked about the Treasury Board form, and even after several readings of the directions, I'm still not clear on something--although carson said it was clear...
If my husband's company has a salary liability to me (a serious amount), does that mean I have "legal title" as far as the form is concerned? ...Because I am legally entitled to that amount, I would presume. But do you think that is having legal title?
Thanks again, lots!
I didn't understand until you gave the additional explanation and example. I can't tell you how much I appreciate this!
Maybe(I hope you don't mind if I get greedy)[:I] you could answer another question? In another area of the forum, I asked about the Treasury Board form, and even after several readings of the directions, I'm still not clear on something--although carson said it was clear...
If my husband's company has a salary liability to me (a serious amount), does that mean I have "legal title" as far as the form is concerned? ...Because I am legally entitled to that amount, I would presume. But do you think that is having legal title?
Thanks again, lots!
Remember that the TD for is for Foreign Accounts, not assets. It says nothing about what you own, or don't own. It is not the same as the CRA's version of foreign property reporting.
If you have access or signing authority to any account, it should in my opinion be reported. It does not signify ownership. It could even include a credit card, if one wanted to be picky. If you can affect a deposit <b>and</b> withdrawal from that account, it is your account.
The TD form was put in place to make one liable to report any conduits he might have to pass money in/out of US. That's all.
<i>nelsona non grata... and non pro</i>
If you have access or signing authority to any account, it should in my opinion be reported. It does not signify ownership. It could even include a credit card, if one wanted to be picky. If you can affect a deposit <b>and</b> withdrawal from that account, it is your account.
The TD form was put in place to make one liable to report any conduits he might have to pass money in/out of US. That's all.
<i>nelsona non grata... and non pro</i>
Hi, nelsona, I should've been clearer.
I do have signing authority the company accounts, and so will report that, but it's the second part, where it asks if I have a financial interest in the accounts, which is stumping me. In the instructions, the part of "financial interest" which might or might not be true in my case is, "...in which such person is the owner of record (no) or <i>has legal title</i>..." (my italics).
That is, would I be considered to "have legal title" if the company owes me money? Say, at dissolution?
I read in the other website (grasmick.com) that you have given hours and hours of your time to help people like me. I cannot tell you how grateful I am to finally see these things more clearly!
I do have signing authority the company accounts, and so will report that, but it's the second part, where it asks if I have a financial interest in the accounts, which is stumping me. In the instructions, the part of "financial interest" which might or might not be true in my case is, "...in which such person is the owner of record (no) or <i>has legal title</i>..." (my italics).
That is, would I be considered to "have legal title" if the company owes me money? Say, at dissolution?
I read in the other website (grasmick.com) that you have given hours and hours of your time to help people like me. I cannot tell you how grateful I am to finally see these things more clearly!
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by marge</i>
Hi, nelsona, I should've been clearer.
I do have signing authority the company accounts, and so will report that, but it's the second part, where it asks if I have a financial interest in the accounts, which is stumping me. In the instructions, the part of "financial interest" which might or might not be true in my case is, "...in which such person is the owner of record (no) or <i>has legal title</i>..." (my italics).
That is, would I be considered to "have legal title" if the company owes me money? Say, at dissolution?
I read in the other website (grasmick.com) that you have given hours and hours of your time to help people like me. I cannot tell you how grateful I am to finally see these things more clearly!
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Marge, Marge, why are you still hung up on this, especially when it does NOT matter, as you already have signing authority? You already qualify under the "OR signing authority" part of the requirements.
You must be anal, like all the accountants I know. [:D]
In answer to your question though, IMHO you must have legal title to the <b>account</b>. Money owing to you by the company does not mean you have any interest in an asset of the company, certainly not the account. You'd have to be a secured creditor (like having a lien) on a specific asset to be considered to have legal title.
Remember, the whole purpose of the form per Nelson's explanation is about reporting foreign accounts.
CRH
Hi, nelsona, I should've been clearer.
I do have signing authority the company accounts, and so will report that, but it's the second part, where it asks if I have a financial interest in the accounts, which is stumping me. In the instructions, the part of "financial interest" which might or might not be true in my case is, "...in which such person is the owner of record (no) or <i>has legal title</i>..." (my italics).
That is, would I be considered to "have legal title" if the company owes me money? Say, at dissolution?
I read in the other website (grasmick.com) that you have given hours and hours of your time to help people like me. I cannot tell you how grateful I am to finally see these things more clearly!
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Marge, Marge, why are you still hung up on this, especially when it does NOT matter, as you already have signing authority? You already qualify under the "OR signing authority" part of the requirements.
You must be anal, like all the accountants I know. [:D]
In answer to your question though, IMHO you must have legal title to the <b>account</b>. Money owing to you by the company does not mean you have any interest in an asset of the company, certainly not the account. You'd have to be a secured creditor (like having a lien) on a specific asset to be considered to have legal title.
Remember, the whole purpose of the form per Nelson's explanation is about reporting foreign accounts.
CRH
Looks like there was a hiccup in the system, everything from yesterday was 'lost'.
I doubt if there was an editorial removal of these including yours (although it was particularly long-winded[;)])
I tried to access late yesterday afternoon and it was completely dead.
<i>nelsona non grata... and non pro</i>
I doubt if there was an editorial removal of these including yours (although it was particularly long-winded[;)])
I tried to access late yesterday afternoon and it was completely dead.
<i>nelsona non grata... and non pro</i>
Yes, it <i>was</i> long-winded!
Nevertheless, since I just happen to have a copy...[^]
Hi, Carson,
You make me smile. Yes, I am super hung-up on details...We had a Federal inspector come to our business once, and he tried to fine us $800, which was a fortune to us at the time (20 years ago). We're super honest, and he would not listen to me at all, maybe because I have no training as an accountant. Our accounting firm was able to dissuade him, basically by saying we're a ma-and-pa operation, and to look at us and ask himself if we were getting rich off the business. But the way he assumed I was out to bilk the government, and shut his ears to reasonable discourse, made me absolutely paranoid about government inspectors! He actually told me it was the first time he'd changed his mind, and told me he was one of the most flexible inspectors. And they say the IRS is way worse than the CRA!
When I've gone to these seminars given at the Consulate by IRS reps, they have shown us ways to answer the tax return correctly, so that the employee looking at the form will understand our case. Like putting "Conversion from Canadian to US funds at 0.7744" and "Overseas Filer" on the top of each page, and attaching to the top of the 1040 a statement that says, "2004 Tax Return filed by extended due date of June 15, 2005 because: 1. I live outside of the United States and Puerto Rico and 2. My Tax Home is outside of the United States and Puerto Rico" and to sign it, print my name, and put my social insurance number underneath!
So I've been bending myself into a pretzel trying to be as anal as they said I should!! I figure any time I can avoid a problem with the IRS, I'll be doing myself a big favour. In other words, it may not help me to be honestly trying my best to fill out these forms--and of course avoiding paying any more taxes than I have to--because if I get someone like the first guy, he'll take me to the cleaners anyway.
Soooooooooo, Thanks very much (sincerely) for your clarification.
Because on the TD F form, at question 26, you have to answer yes or no, Does the filer have a financial interest in this account. And if the answer is no, as you've helped me see that it is, only then do I have to provide the name of our company and its address. Which of course I'd rather not do. Question of privacy. My husband's.
The question of signing authority, by the way, is separate. That's what determines whether I have to include the company account in my list of accounts in the first place. I think?
Rather long-winded, but it was fun. Thank you and Nelson so much for being there! You have no idea how confusing all this stuff is to the unitiated!!
Nevertheless, since I just happen to have a copy...[^]
Hi, Carson,
You make me smile. Yes, I am super hung-up on details...We had a Federal inspector come to our business once, and he tried to fine us $800, which was a fortune to us at the time (20 years ago). We're super honest, and he would not listen to me at all, maybe because I have no training as an accountant. Our accounting firm was able to dissuade him, basically by saying we're a ma-and-pa operation, and to look at us and ask himself if we were getting rich off the business. But the way he assumed I was out to bilk the government, and shut his ears to reasonable discourse, made me absolutely paranoid about government inspectors! He actually told me it was the first time he'd changed his mind, and told me he was one of the most flexible inspectors. And they say the IRS is way worse than the CRA!
When I've gone to these seminars given at the Consulate by IRS reps, they have shown us ways to answer the tax return correctly, so that the employee looking at the form will understand our case. Like putting "Conversion from Canadian to US funds at 0.7744" and "Overseas Filer" on the top of each page, and attaching to the top of the 1040 a statement that says, "2004 Tax Return filed by extended due date of June 15, 2005 because: 1. I live outside of the United States and Puerto Rico and 2. My Tax Home is outside of the United States and Puerto Rico" and to sign it, print my name, and put my social insurance number underneath!
So I've been bending myself into a pretzel trying to be as anal as they said I should!! I figure any time I can avoid a problem with the IRS, I'll be doing myself a big favour. In other words, it may not help me to be honestly trying my best to fill out these forms--and of course avoiding paying any more taxes than I have to--because if I get someone like the first guy, he'll take me to the cleaners anyway.
Soooooooooo, Thanks very much (sincerely) for your clarification.
Because on the TD F form, at question 26, you have to answer yes or no, Does the filer have a financial interest in this account. And if the answer is no, as you've helped me see that it is, only then do I have to provide the name of our company and its address. Which of course I'd rather not do. Question of privacy. My husband's.
The question of signing authority, by the way, is separate. That's what determines whether I have to include the company account in my list of accounts in the first place. I think?
Rather long-winded, but it was fun. Thank you and Nelson so much for being there! You have no idea how confusing all this stuff is to the unitiated!!
Yup, that's me. [;)] (I started saving them because I lost a couple...actually I lost this one, too, because I forgot to sign in first.)
But it didn't save my smiley-faces. [V]
It really was fun, though, to tell my 'inspector' story to someone who could understand.
I can finally finish off my taxes today thanks to this website...if you will just say if my understanding of the form is OK or not, please? i.e.--
a) I am obliged to list the company accounts (because I have signing authority); and
b) I have to give the company name and address (in #27 and #31-35) (because I answer "no" to question 26, "Does the filer have a financial interest in this account," since I have no financial interest in the company, only signing authority.
I hope you'll bear with me on this...[:o)]
But it didn't save my smiley-faces. [V]
It really was fun, though, to tell my 'inspector' story to someone who could understand.
I can finally finish off my taxes today thanks to this website...if you will just say if my understanding of the form is OK or not, please? i.e.--
a) I am obliged to list the company accounts (because I have signing authority); and
b) I have to give the company name and address (in #27 and #31-35) (because I answer "no" to question 26, "Does the filer have a financial interest in this account," since I have no financial interest in the company, only signing authority.
I hope you'll bear with me on this...[:o)]
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by marge</i>
Yup, that's me. [;)] (I started saving them because I lost a couple...actually I lost this one, too, because I forgot to sign in first.)
But it didn't save my smiley-faces. [V]
It really was fun, though, to tell my 'inspector' story to someone who could understand.
I can finally finish off my taxes today thanks to this website...if you will just say if my understanding of the form is OK or not, please? i.e.--
a) I am obliged to list the company accounts (because I have signing authority); and
b) I have to give the company name and address (in #27 and #31-35) (because I answer "no" to question 26, "Does the filer have a financial interest in this account," since I have no financial interest in the company, only signing authority.
I hope you'll bear with me on this...[:o)]
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Hi Marge.
IMHO, you understand the form instructions correctly. That is how I report signing authority on business accounts for US clients.
Now, get those forms off in the mail and forget about them for another year. Time to enjoy the summer weather! [8D]
Regards,
CRH
Yup, that's me. [;)] (I started saving them because I lost a couple...actually I lost this one, too, because I forgot to sign in first.)
But it didn't save my smiley-faces. [V]
It really was fun, though, to tell my 'inspector' story to someone who could understand.
I can finally finish off my taxes today thanks to this website...if you will just say if my understanding of the form is OK or not, please? i.e.--
a) I am obliged to list the company accounts (because I have signing authority); and
b) I have to give the company name and address (in #27 and #31-35) (because I answer "no" to question 26, "Does the filer have a financial interest in this account," since I have no financial interest in the company, only signing authority.
I hope you'll bear with me on this...[:o)]
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Hi Marge.
IMHO, you understand the form instructions correctly. That is how I report signing authority on business accounts for US clients.
Now, get those forms off in the mail and forget about them for another year. Time to enjoy the summer weather! [8D]
Regards,
CRH