Hi,
There have been numerous threads on related topics and I think I understand the gist of what I need to do, but want to be sure I get this right.
I'm a citizen and resident of Canada and I renounced my US citizenship in mid-2016.
I've prepared my tax forms based on the assumption that this would be a dual-status year. I can see from the threads that I probably could have elected to file a full year 1040 which would have been simpler but I applied for a six month extension checking that box that said I intended to file a 1040NR so I guess I"m stuck with this now. Plus I've already done all the work except for making the numbers from the 1040 statement flow through to the 1040NR.
I'm still uncertain about how technically to flow through the data from the 1040 statement to the 1040NR controlling document!
My only worldwide income during the year is wages from my Canadian employersand this is declared for the part of the year I was still a US citizen in the 1040 Dual status statement on line 7. The entirety of this income is excluded via form 2555 (prorated based on portion of the year I was still a citizen) and this negative amount for the FEIE appears on the 1040 statement on line 21.
1. Do I simply port the numbers from 1040 line 7 to 1040NR line 8, and the foreign earned income exclusion amount from 1040 line 21 to 1040NR line 21? I'm assuming I should label the lines and perhaps write in a covering document where these numbers came from? Some sources seem to indicate that I shouldn't port anything but taxes owing from the 1040 statement to the 1040NR (my Taxact software for example does not port income number it ports only resulting tax). However responses in this forum seem to indicate the opposite that I should port the income numbers and do all the tax calculations in the context of the 1040NR controlling document.
2. Do I need to do anything special with exclusions - are exclusions on the 1040 statement not even part of the statement or do I need to worry about doing exclusion math (11.10/day/exclusion for the period I was still a citizen) and porting those numbers to the 1040NR? Exclusion rules should be similar for both parts of the year because as a resident of Canada we'd be subject to special rules about eligibility of no-income/not-filing spouse. I don't need any exclusions anyway because income is zero after the 2555 but I want to get things right.
3. What do I do with the supporting forms - are they part of/related to the controlling document or the 1040 statement? Specifically for the following:
- f8833 for article XVIII(7) treatment of Canadian RRSPs that appear in f8938 per rev proc 2014-55
- f1116 foreign tax credit for tax paid on income relating to the 1040 part of the year (net zero on this because line 12 reduces it to nothing as all my income is excluded on 2555, but filing the form on the off chance there's any probem later and I need it)
- f2555 foreign earned income exclusion (line 38 prorated to include only days when I was still a citizen)
- f8965 health coverage exemptions
- f8938 statements of specified forieign financial assets
do I need to label these 'Dual Status Statement' or 'Dual Status Return' or not specially labeled at all? I'm assuming that the copies of the 8854 expatriation statement don't bear any special labeling (other than 'COPY' for the one destined for Philadelphia) and goes at or near the front of my paperwork.
Dual status return flow of info in year of renunciation
Moderator: Mark T Serbinski CA CPA
Re: Dual status return flow of info in year of renunciation
Oops on question two I meant exemptions not exclusions.. I know they are different things. :)
[quote="eajohnson"]Hi,
There have been numerous threads on related topics and I think I understand the gist of what I need to do, but want to be sure I get this right.
I'm a citizen and resident of Canada and I renounced my US citizenship in mid-2016.
I've prepared my tax forms based on the assumption that this would be a dual-status year. I can see from the threads that I probably could have elected to file a full year 1040 which would have been simpler but I applied for a six month extension checking that box that said I intended to file a 1040NR so I guess I"m stuck with this now. Plus I've already done all the work except for making the numbers from the 1040 statement flow through to the 1040NR.
I'm still uncertain about how technically to flow through the data from the 1040 statement to the 1040NR controlling document!
My only worldwide income during the year is wages from my Canadian employersand this is declared for the part of the year I was still a US citizen in the 1040 Dual status statement on line 7. The entirety of this income is excluded via form 2555 (prorated based on portion of the year I was still a citizen) and this negative amount for the FEIE appears on the 1040 statement on line 21.
1. Do I simply port the numbers from 1040 line 7 to 1040NR line 8, and the foreign earned income exclusion amount from 1040 line 21 to 1040NR line 21? I'm assuming I should label the lines and perhaps write in a covering document where these numbers came from? Some sources seem to indicate that I shouldn't port anything but taxes owing from the 1040 statement to the 1040NR (my Taxact software for example does not port income number it ports only resulting tax). However responses in this forum seem to indicate the opposite that I should port the income numbers and do all the tax calculations in the context of the 1040NR controlling document.
2. Do I need to do anything special with exclusions - are exclusions on the 1040 statement not even part of the statement or do I need to worry about doing exclusion math (11.10/day/exclusion for the period I was still a citizen) and porting those numbers to the 1040NR? Exclusion rules should be similar for both parts of the year because as a resident of Canada we'd be subject to special rules about eligibility of no-income/not-filing spouse. I don't need any exclusions anyway because income is zero after the 2555 but I want to get things right.
3. What do I do with the supporting forms - are they part of/related to the controlling document or the 1040 statement? Specifically for the following:
- f8833 for article XVIII(7) treatment of Canadian RRSPs that appear in f8938 per rev proc 2014-55
- f1116 foreign tax credit for tax paid on income relating to the 1040 part of the year (net zero on this because line 12 reduces it to nothing as all my income is excluded on 2555, but filing the form on the off chance there's any probem later and I need it)
- f2555 foreign earned income exclusion (line 38 prorated to include only days when I was still a citizen)
- f8965 health coverage exemptions
- f8938 statements of specified forieign financial assets
do I need to label these 'Dual Status Statement' or 'Dual Status Return' or not specially labeled at all? I'm assuming that the copies of the 8854 expatriation statement don't bear any special labeling (other than 'COPY' for the one destined for Philadelphia) and goes at or near the front of my paperwork.[/quote]
[quote="eajohnson"]Hi,
There have been numerous threads on related topics and I think I understand the gist of what I need to do, but want to be sure I get this right.
I'm a citizen and resident of Canada and I renounced my US citizenship in mid-2016.
I've prepared my tax forms based on the assumption that this would be a dual-status year. I can see from the threads that I probably could have elected to file a full year 1040 which would have been simpler but I applied for a six month extension checking that box that said I intended to file a 1040NR so I guess I"m stuck with this now. Plus I've already done all the work except for making the numbers from the 1040 statement flow through to the 1040NR.
I'm still uncertain about how technically to flow through the data from the 1040 statement to the 1040NR controlling document!
My only worldwide income during the year is wages from my Canadian employersand this is declared for the part of the year I was still a US citizen in the 1040 Dual status statement on line 7. The entirety of this income is excluded via form 2555 (prorated based on portion of the year I was still a citizen) and this negative amount for the FEIE appears on the 1040 statement on line 21.
1. Do I simply port the numbers from 1040 line 7 to 1040NR line 8, and the foreign earned income exclusion amount from 1040 line 21 to 1040NR line 21? I'm assuming I should label the lines and perhaps write in a covering document where these numbers came from? Some sources seem to indicate that I shouldn't port anything but taxes owing from the 1040 statement to the 1040NR (my Taxact software for example does not port income number it ports only resulting tax). However responses in this forum seem to indicate the opposite that I should port the income numbers and do all the tax calculations in the context of the 1040NR controlling document.
2. Do I need to do anything special with exclusions - are exclusions on the 1040 statement not even part of the statement or do I need to worry about doing exclusion math (11.10/day/exclusion for the period I was still a citizen) and porting those numbers to the 1040NR? Exclusion rules should be similar for both parts of the year because as a resident of Canada we'd be subject to special rules about eligibility of no-income/not-filing spouse. I don't need any exclusions anyway because income is zero after the 2555 but I want to get things right.
3. What do I do with the supporting forms - are they part of/related to the controlling document or the 1040 statement? Specifically for the following:
- f8833 for article XVIII(7) treatment of Canadian RRSPs that appear in f8938 per rev proc 2014-55
- f1116 foreign tax credit for tax paid on income relating to the 1040 part of the year (net zero on this because line 12 reduces it to nothing as all my income is excluded on 2555, but filing the form on the off chance there's any probem later and I need it)
- f2555 foreign earned income exclusion (line 38 prorated to include only days when I was still a citizen)
- f8965 health coverage exemptions
- f8938 statements of specified forieign financial assets
do I need to label these 'Dual Status Statement' or 'Dual Status Return' or not specially labeled at all? I'm assuming that the copies of the 8854 expatriation statement don't bear any special labeling (other than 'COPY' for the one destined for Philadelphia) and goes at or near the front of my paperwork.[/quote]