Hi,
Before moving to US last year I had a brokerage account for forex options in the US. I ended all the activity in the account and closed it prior to moving to the US so I could keep it all in Canada, plus to avoid departure tax on that account.
It turns out that the company had incorrect info about on file and they issued me a 1099-B for last year. It only shows $195 gain and no taxes withheld.
I will certainly report this income on my Canadian return as it was part of my activity when I was still a resident of Canada, that's not a problem.
My question is regarding 1040NR. Do I have to report this anywhere? I'm thinking not since all of this activity took place before I moved to the US so this income was not effectively connected. My only worry is that since IRS received that very form 1099-B they are expecting it to be reported on my 1040NR somewhere.
So, do I have to report it anywhere or not? I'm thinking not but wanted to double check with someone who might have experience with this sort of thing.
Thanks!
Incorrectly received 1099-B, do I need to report on 1040NR?
Moderator: Mark T Serbinski CA CPA
The investments are not connected, but not because you were non-resident, but because you were not conducting a business in US.
You should include it ON your 1040NR as part of the income you are excluding by treaty, on the last 2 pages of the 1040NR.
You should include it ON your 1040NR as part of the income you are excluding by treaty, on the last 2 pages of the 1040NR.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Thank you for replying Nelsona!
I will include it on the NEC schedule then but since this income does not really fall under any of the listed categories (money made from trading) I will use line 12 as other income.
1. Do I then use column d and put 0% tax rate to calculate the tax? I assume so because it is income exempt by treaty so that's the only thing that makes sense.
On the page 5 I will do question L. I'm not sure but I'm afraid I will have to do form 8833 with it as well...
I will include it on the NEC schedule then but since this income does not really fall under any of the listed categories (money made from trading) I will use line 12 as other income.
1. Do I then use column d and put 0% tax rate to calculate the tax? I assume so because it is income exempt by treaty so that's the only thing that makes sense.
On the page 5 I will do question L. I'm not sure but I'm afraid I will have to do form 8833 with it as well...
Hello,
Investigating further I'm not sure here as I read publication 901 but it only applies to services performed in the United States. It does not mention any exemption on income when you are outside. This makes sense as income for services performed outside of the US is exempt.
What is confusing the situation is the stupid 1099-B form which implies that I had capital gain/loss income in the US but that's not what it is at all. I was in business on my own buying and selling forex options and I declare this income in Canada as self-proprietor business income NOT income from capital gains or losses. It's the same as buying and selling widgets except here widgets are the forex options.
This whole thing makes me think that I don't need to do anything on page 5 of form 1040NR but only page 4 schedule NEC like Nelsona mentioned in his post and I explained in my previous reply to him.
Another thing... Doing schedule NEC does not mean I have to do question L on page 5 or vice versa. It is possible to do one or the other and not both, correct?
What do you all think?
Investigating further I'm not sure here as I read publication 901 but it only applies to services performed in the United States. It does not mention any exemption on income when you are outside. This makes sense as income for services performed outside of the US is exempt.
What is confusing the situation is the stupid 1099-B form which implies that I had capital gain/loss income in the US but that's not what it is at all. I was in business on my own buying and selling forex options and I declare this income in Canada as self-proprietor business income NOT income from capital gains or losses. It's the same as buying and selling widgets except here widgets are the forex options.
This whole thing makes me think that I don't need to do anything on page 5 of form 1040NR but only page 4 schedule NEC like Nelsona mentioned in his post and I explained in my previous reply to him.
Another thing... Doing schedule NEC does not mean I have to do question L on page 5 or vice versa. It is possible to do one or the other and not both, correct?
What do you all think?
money made from trading is capital gains, but it is not your business income.
Didn't I just answer this? it is exmpt income reported as such on the back pages.
Didn't I just answer this? it is exmpt income reported as such on the back pages.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best