Thank you for that response. I guess what I am wondering is, is that the right way to treat it? Those have never been considered "foreign income" before. I could see the argument either way I guess. Since those sales actually occur in securities accounts that are located within the US, is that really foreign income? It never leaves the border. Dividends are different because they originate in a foreign country and so they take their "cut" before it leaves there.

Nancy:

Great question and I think you answered it correctly.  Please let us know what you hear from their Brokers.

The one that I completed did not have any sales of foreign companies just dividends (it is a stock club).   Depending on how many partners you have you may need extra paper - the one I did had 12 partners and it produced an extra 8 pages for each partner.  Largest tax return we have ever had to print.

I am going to look for a class on this after tax season.

Dusty