Foreign Dividend income

[Russ]

Do I put the Dividend income on Sch B do I need to  filled out another form also. The amount is around 10, 000 US 

Russ

[sjrcpa]

Yes it gets reported on Sch B.

FBAR and/or 8938 may be required.

[George4Tacks]

Be sure to populate the questions at the bottom of Schedule B about foreign income. The HOW depends on your software, which you should always choose before posting a question.

[itonewbie]

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@George4Tacks wrote:

Be sure to populate the questions at the bottom of Schedule B about foreign income. The HOW depends on your software, which you should always choose before posting a question.

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Agree, if the taxpayer has foreign income tax paid on passive income.

[Russ]

What is the determine  if we need the 8339 or FBAR ?

[itonewbie]

If the dividend is from foreign mutual funds, REIT, etc., your client may be subject to PFIC and have a F.8621 reporting requirement, which could get costly in terms of compliance burden, tax regime, and potential penalties for incompliance, not to mention that delinquent filing will toll the SOL on the entire return.

[itonewbie]

There are also specific requirements that determine whether foreign dividends can be treated as qualified dividends for US tax purposes.

[Russ]

Is there a video on this topic so I can understand what I am doing if so can you please give me the link to it please?

Russ 

[itonewbie]

It all depends on how complex your client's setup is.  It may be as simple as these dividends coming from US-listed shares/ADR and being reported on a 1099-DIV.

FBAR and FATCA (Form 8938) are relative straight forward.  You should be able to understand the requirements by reading the filing instructions and IRS pubs.

For more complex issues, there is not one single source you can go to.  You will need to piece together many different code sections, regulations, Rev. Proc., etc.  CPE courses in this area also tend not to be comprehensive, partly because the law is expansive - and part of which actually lacks clear IRS guidance.

Basic questions are: Is the dividend from a CFC?  If so, is your client a 10% shareholder, officer or director?  If not, are these publicly traded securities?  If so, are these foreign mutual funds, REIT, or similar types of investments?  Are these securities listed on the US exchange or are these ADR?  If not, in which country were these shares issued?  Are these shares held in a trading account overseas?  Did your client reside in a foreign country during 2019?   Did you find out what the maximum aggregate balance and value of your client's foreign bank and financial accounts as well as foreign financial assets were?

[sjrcpa]

Read the instructions for each form.

[Russ]

Be honest with you this  is the last part of a job interview process that I have apply for a job for. So I have go by with just want the company gave me to go on.  I know that the clinet is  an self employed person and sing tutor for to be able to make the income. The business is registered as a El Wtih limited personal liability. The $10000 is from the Carrefour which is (French Corp) . After looking at the website I realize that it is a department store. The client leaves in Paris France 

I did filled out the sch B along with 8938 with the information as a  didend but when I check the 1040 in Proconeet it show that there is nothing showing in the interest or divendent line. I think they should be 10000. 

I did 2555 on that form    it shows that maxium amount that is eclunded which on the form around $ 101,500.  The total income is aound 152,000. I think the rest of the money should be on the 1040 can  you tell me if my thinking is correct or not. 

I am calling it a day now and I will check in tomorrow. I apprecate you taking time to help me with this situation 

[itonewbie]

This forum is only open to genuine tax professionals.  We are not here to help students with homework, let alone someone with their interview assignment.

I would be disappointed, to say the least, if I find that my candidate to whom I had assigned a practical problem to solve as part of the selection process, had solicited technical input from experienced professionals instead of doing his/her own research and exercising his/her own due diligence.

[Russ]

OK thanks I will respect your thought on the subject. Thanks for your time.