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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Steve Felix who wrote (5234)	7/28/2010 5:50:22 PM
From: Paul Senior	1 Recommendation Read Replies (2) \| Respond to of 34328

foreign tax credit. This subject won't die, it just keeps coming back. -g- So many newbies to foreign (non-USA) stocks. Here's where the US government might have it wrong for newbies. The government does say, "To choose the foreign tax credit you generally must complete Form 1116". That form can be ignored though if your total creditable foreign taxes are $300 or less ($600 or less on a joint return) and you meet certain other requirements If anybody's in this category, which imo, small players might "generally" be, then they just put that credit amount on line 47 of p. 2 of the 1040, and that should do it. They get the credit against their taxes. For substantial foreign stock income (over $600/yr number) I have found figuring out Form 1116 to be a real bear. You're supposed to collect foreign income from all sources and be able to document from which country. And if your mutual funds have foreign income stocks, that may or may not count. I've never been able to figure out or complete the form, and even when I've tried TurboTax it stalled on me at that point. My accountant can do it, and I read of people on SI who seem to have no trouble. Bless 'em. Jmo, and from info from my experience. Could be right or wrong. I'm no tax expert.