This is about a Canadian bond mutual fund I have that reinvests all distributions and grows in value basically by those distributions only. I'll be reporting in on f8621 for the first time, all calculations as for the current year, 2011.
The result of the Part III 5a and 5b calculations, therefore, is that I must include these distributions as "other income".
However, Part IV 10a, asks that I include these actual distributions and (according to the instructions just before 10c) they are to be entered on f1040 as "dividends".
The way I see it, I'll be getting taxed twice on basically the same amount. Once as "other income" and again as "dividends".
Does anyone see a way around this, or am I figuring things wrong. Thanks!
Form 8621 - gettting taxed twice for the same amount?
Moderator: Mark T Serbinski CA CPA