Hello,
Could anyone please tell me whether foreign non-business income (box 25) from a Canadian mutual fund should be included in ordinary dividends on line 9a of Form 1040?
I can't find anything about this on the forum.
Thanks.
Canadian mutual funds - foreign non-business income (box 25
Moderator: Mark T Serbinski CA CPA
-
- Posts: 30
- Joined: Fri Jan 08, 2010 12:11 pm
- Location: Victoria BC
- Contact:
It really depends on what the "foreign income" is.
Do you have a T3/T5 summary that shows what the source of the income is?
Is it US source or another country?
Do you have a T3/T5 summary that shows what the source of the income is?
Is it US source or another country?
Phil Hogan, CA, CPA (Colorado)
Cross-border investment advisor
http://philhogan.com
250-661-9417
Victoria BC
Cross-border investment advisor
http://philhogan.com
250-661-9417
Victoria BC
Hi Abelc61,
I'm by no means an expert, and certainly not a pro.
From what I've read about PFIC reporting and from limited experience, any income earned in a PFIC is calculated using form 8621, and the income will always end up as "other income" on your 1040 if you go the mark-to-market route. The only exception is if you sell a foreign mutual fund (PFIC) under a mark-to-market election and you have a loss. In the case of a loss, from a sale, this loss would end up on schedule D.
The unfortunate thing is that any income from a foreign mutual fund, even if US source, is re-characterized as "other".
There might be a way around this, if you can make a "QEF" election on 8621. But I hear that it is nearly impossible to get a statement from the mutual fund that would have the required information for a QEF. Mark-to-market seems to be the only easy route - and it can sometimes lead to a double tax if you get a mark-to-market gain and no corresponding capital gain tax in Canada.
I hope this helps - get some other opinions as well.
I'm by no means an expert, and certainly not a pro.
From what I've read about PFIC reporting and from limited experience, any income earned in a PFIC is calculated using form 8621, and the income will always end up as "other income" on your 1040 if you go the mark-to-market route. The only exception is if you sell a foreign mutual fund (PFIC) under a mark-to-market election and you have a loss. In the case of a loss, from a sale, this loss would end up on schedule D.
The unfortunate thing is that any income from a foreign mutual fund, even if US source, is re-characterized as "other".
There might be a way around this, if you can make a "QEF" election on 8621. But I hear that it is nearly impossible to get a statement from the mutual fund that would have the required information for a QEF. Mark-to-market seems to be the only easy route - and it can sometimes lead to a double tax if you get a mark-to-market gain and no corresponding capital gain tax in Canada.
I hope this helps - get some other opinions as well.