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How To Fill 1040nr

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How To Fill 1040nr

How to fill 1040nr 8. How to fill 1040nr   Dividends and Other Distributions Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. How to fill 1040nr Reporting tax withheld. How to fill 1040nr Nominees. How to fill 1040nr Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. How to fill 1040nr Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. How to fill 1040nr Alternative minimum tax treatment. How to fill 1040nr How To Report Dividend IncomeInvestment interest deducted. How to fill 1040nr Reminder Foreign-source income. How to fill 1040nr  If you are a U. How to fill 1040nr S. How to fill 1040nr citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U. How to fill 1040nr S. How to fill 1040nr law. How to fill 1040nr This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. How to fill 1040nr Introduction This chapter discusses the tax treatment of: Ordinary dividends, Capital gain distributions, Nondividend distributions, and Other distributions you may receive from a corporation or a mutual fund. How to fill 1040nr This chapter also explains how to report dividend income on your tax return. How to fill 1040nr Dividends are distributions of money, stock, or other property paid to you by a corporation or by a mutual fund. How to fill 1040nr You also may receive dividends through a partnership, an estate, a trust, or an association that is taxed as a corporation. How to fill 1040nr However, some amounts you receive that are called dividends are actually interest income. How to fill 1040nr (See Dividends that are actually interest under Taxable Interest in chapter 7. How to fill 1040nr ) Most distributions are paid in cash (or check). How to fill 1040nr However, distributions can consist of more stock, stock rights, other property, or services. How to fill 1040nr Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 550 Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends General Information This section discusses general rules for dividend income. How to fill 1040nr Tax on unearned income of certain children. How to fill 1040nr   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. How to fill 1040nr If it is, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. How to fill 1040nr If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. How to fill 1040nr    Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. How to fill 1040nr Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. How to fill 1040nr   For more information about the tax on unearned income of children and the parents' election, see chapter 31. How to fill 1040nr Beneficiary of an estate or trust. How to fill 1040nr    Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. How to fill 1040nr You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. How to fill 1040nr , from the fiduciary. How to fill 1040nr Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. How to fill 1040nr Social security number (SSN) or individual taxpayer identification number (ITIN). How to fill 1040nr    You must give your SSN or ITIN to any person required by federal tax law to make a return, statement, or other document that relates to you. How to fill 1040nr This includes payers of dividends. How to fill 1040nr If you do not give your SSN or ITIN to the payer of dividends, you may have to pay a penalty. How to fill 1040nr For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. How to fill 1040nr Backup withholding. How to fill 1040nr   Your dividend income is generally not subject to regular withholding. How to fill 1040nr However, it may be subject to backup withholding to ensure that income tax is collected on the income. How to fill 1040nr Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. How to fill 1040nr   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. How to fill 1040nr For more information, see Backup Withholding in chapter 4. How to fill 1040nr Stock certificate in two or more names. How to fill 1040nr   If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law. How to fill 1040nr Form 1099-DIV. How to fill 1040nr   Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. How to fill 1040nr Keep this form with your records. How to fill 1040nr You do not have to attach it to your tax return. How to fill 1040nr Dividends not reported on Form 1099-DIV. How to fill 1040nr   Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. How to fill 1040nr For example, you may receive distributive shares of dividends from partnerships or S corporations. How to fill 1040nr These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. How to fill 1040nr , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. How to fill 1040nr Reporting tax withheld. How to fill 1040nr   If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld. How to fill 1040nr Nominees. How to fill 1040nr   If someone receives distributions as a nominee for you, that person should give you a Form 1099-DIV, which will show distributions received on your behalf. How to fill 1040nr Form 1099-MISC. How to fill 1040nr   Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. How to fill 1040nr See Reporting Substitute Payments under Short Sales in chapter 4 of Publication 550 for more information about reporting these payments. How to fill 1040nr Incorrect amount shown on a Form 1099. How to fill 1040nr   If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. How to fill 1040nr The new Form 1099 you receive will be marked “Corrected. How to fill 1040nr ” Dividends on stock sold. How to fill 1040nr   If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income. How to fill 1040nr Dividends received in January. How to fill 1040nr   If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. How to fill 1040nr You report the dividend in the year it was declared. How to fill 1040nr Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. How to fill 1040nr They are paid out of earnings and profits and are ordinary income to you. How to fill 1040nr This means they are not capital gains. How to fill 1040nr You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. How to fill 1040nr Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. How to fill 1040nr Qualified Dividends Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. How to fill 1040nr They should be shown in box 1b of the Form 1099-DIV you receive. How to fill 1040nr The maximum rate of tax on qualified dividends is: 0% on any amount that otherwise would be taxed at a 10% or 15% rate. How to fill 1040nr 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39. How to fill 1040nr 6%. How to fill 1040nr 20% on any amount that otherwise would be taxed at a 39. How to fill 1040nr 6% rate. How to fill 1040nr To qualify for the maximum rate, all of the following requirements must be met. How to fill 1040nr The dividends must have been paid by a U. How to fill 1040nr S. How to fill 1040nr corporation or a qualified foreign corporation. How to fill 1040nr (See Qualified foreign corporation , later. How to fill 1040nr ) The dividends are not of the type listed later under Dividends that are not qualified dividends . How to fill 1040nr You meet the holding period (discussed next). How to fill 1040nr Holding period. How to fill 1040nr   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. How to fill 1040nr The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. How to fill 1040nr Instead, the seller will get the dividend. How to fill 1040nr   When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. How to fill 1040nr See the examples later. How to fill 1040nr Exception for preferred stock. How to fill 1040nr   In the case of preferred stock, you must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days. How to fill 1040nr If the preferred dividends are due to periods totaling less than 367 days, the holding period in the previous paragraph applies. How to fill 1040nr Example 1. How to fill 1040nr You bought 5,000 shares of XYZ Corp. How to fill 1040nr common stock on July 9, 2013. How to fill 1040nr XYZ Corp. How to fill 1040nr paid a cash dividend of 10 cents per share. How to fill 1040nr The ex-dividend date was July 16, 2013. How to fill 1040nr Your Form 1099-DIV from XYZ Corp. How to fill 1040nr shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). How to fill 1040nr However, you sold the 5,000 shares on August 12, 2013. How to fill 1040nr You held your shares of XYZ Corp. How to fill 1040nr for only 34 days of the 121-day period (from July 10, 2013, through August 12, 2013). How to fill 1040nr The 121-day period began on May 17, 2013 (60 days before the ex-dividend date), and ended on September 14, 2013. How to fill 1040nr You have no qualified dividends from XYZ Corp. How to fill 1040nr because you held the XYZ stock for less than 61 days. How to fill 1040nr Example 2. How to fill 1040nr Assume the same facts as in Example 1 except that you bought the stock on July 15, 2013 (the day before the ex-dividend date), and you sold the stock on September 16, 2013. How to fill 1040nr You held the stock for 63 days (from July 16, 2013, through September 16, 2013). How to fill 1040nr The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2013, through September 14, 2013). How to fill 1040nr Example 3. How to fill 1040nr You bought 10,000 shares of ABC Mutual Fund common stock on July 9, 2013. How to fill 1040nr ABC Mutual Fund paid a cash dividend of 10 cents a share. How to fill 1040nr The ex-dividend date was July 16, 2013. How to fill 1040nr The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. How to fill 1040nr Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. How to fill 1040nr However, you sold the 10,000 shares on August 12, 2013. How to fill 1040nr You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. How to fill 1040nr Holding period reduced where risk of loss is diminished. How to fill 1040nr   When determining whether you met the minimum holding period discussed earlier, you cannot count any day during which you meet any of the following conditions. How to fill 1040nr You had an option to sell, were under a contractual obligation to sell, or had made (and not closed) a short sale of substantially identical stock or securities. How to fill 1040nr You were grantor (writer) of an option to buy substantially identical stock or securities. How to fill 1040nr Your risk of loss is diminished by holding one or more other positions in substantially similar or related property. How to fill 1040nr   For information about how to apply condition (3), see Regulations section 1. How to fill 1040nr 246-5. How to fill 1040nr Qualified foreign corporation. How to fill 1040nr   A foreign corporation is a qualified foreign corporation if it meets any of the following conditions. How to fill 1040nr The corporation is incorporated in a U. How to fill 1040nr S. How to fill 1040nr possession. How to fill 1040nr The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Treasury Department determines is satisfactory for this purpose and that includes an exchange of information program. How to fill 1040nr For a list of those treaties, see Table 8-1. How to fill 1040nr The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. How to fill 1040nr See Readily tradable stock , later. How to fill 1040nr Exception. How to fill 1040nr   A corporation is not a qualified foreign corporation if it is a passive foreign investment company during its tax year in which the dividends are paid or during its previous tax year. How to fill 1040nr Readily tradable stock. How to fill 1040nr   Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation , if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. How to fill 1040nr For a list of the exchanges that meet these requirements, see www. How to fill 1040nr sec. How to fill 1040nr gov/divisions/marketreg/mrexchanges. How to fill 1040nr shtml. How to fill 1040nr Dividends that are not qualified dividends. How to fill 1040nr   The following dividends are not qualified dividends. How to fill 1040nr They are not qualified dividends even if they are shown in box 1b of Form 1099-DIV. How to fill 1040nr Capital gain distributions. How to fill 1040nr Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U. How to fill 1040nr S. How to fill 1040nr building and loan associations, U. How to fill 1040nr S. How to fill 1040nr savings and loan associations, federal savings and loan associations, and similar financial institutions. How to fill 1040nr (Report these amounts as interest income. How to fill 1040nr ) Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year. How to fill 1040nr Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation. How to fill 1040nr Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. How to fill 1040nr Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. How to fill 1040nr Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. How to fill 1040nr Table 8-1. How to fill 1040nr Income Tax Treaties Income tax treaties the United States has with the following countries satisfy requirement (2) under Qualified foreign corporation. How to fill 1040nr Australia Indonesia Romania Austria Ireland Russian Bangladesh Israel Federation Barbados Italy Slovak Belgium Jamaica Republic Bulgaria Japan Slovenia Canada Kazakhstan South Africa China Korea Spain Cyprus Latvia Sri Lanka Czech Lithuania Sweden Republic Luxembourg Switzerland Denmark Malta Thailand Egypt Mexico Trinidad and Estonia Morocco Tobago Finland Netherlands Tunisia France New Zealand Turkey Germany Norway Ukraine Greece Pakistan United Hungary Philippines Kingdom Iceland Poland Venezuela India Portugal     Dividends Used to Buy More Stock The corporation in which you own stock may have a dividend reinvestment plan. How to fill 1040nr This plan lets you choose to use your dividends to buy (through an agent) more shares of stock in the corporation instead of receiving the dividends in cash. How to fill 1040nr Most mutual funds also permit shareholders to automatically reinvest distributions in more shares in the fund, instead of receiving cash. How to fill 1040nr If you use your dividends to buy more stock at a price equal to its fair market value, you still must report the dividends as income. How to fill 1040nr If you are a member of a dividend reinvestment plan that lets you buy more stock at a price less than its fair market value, you must report as dividend income the fair market value of the additional stock on the dividend payment date. How to fill 1040nr You also must report as dividend income any service charge subtracted from your cash dividends before the dividends are used to buy the additional stock. How to fill 1040nr But you may be able to deduct the service charge. How to fill 1040nr See chapter 28 for more information about deducting expenses of producing income. How to fill 1040nr In some dividend reinvestment plans, you can invest more cash to buy shares of stock at a price less than fair market value. How to fill 1040nr If you choose to do this, you must report as dividend income the difference between the cash you invest and the fair market value of the stock you buy. How to fill 1040nr When figuring this amount, use the fair market value of the stock on the dividend payment date. How to fill 1040nr Money Market Funds Report amounts you receive from money market funds as dividend income. How to fill 1040nr Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest. How to fill 1040nr Capital Gain Distributions Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). How to fill 1040nr They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT. How to fill 1040nr Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT. How to fill 1040nr Undistributed capital gains of mutual funds and REITs. How to fill 1040nr    Some mutual funds and REITs keep their long-term capital gains and pay tax on them. How to fill 1040nr You must treat your share of these gains as distributions, even though you did not actually receive them. How to fill 1040nr However, they are not included on Form 1099-DIV. How to fill 1040nr Instead, they are reported to you in box 1a of Form 2439. How to fill 1040nr   Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), column (h), line 11. How to fill 1040nr   The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. How to fill 1040nr You take credit for this tax by including it on Form 1040, line 71, and checking box a on that line. How to fill 1040nr Attach Copy B of Form 2439 to your return, and keep Copy C for your records. How to fill 1040nr Basis adjustment. How to fill 1040nr   Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid. How to fill 1040nr Additional information. How to fill 1040nr   For more information on the treatment of distributions from mutual funds, see Publication 550. How to fill 1040nr Nondividend Distributions A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation or a mutual fund. How to fill 1040nr You should receive a Form 1099-DIV or other statement showing the nondividend distribution. How to fill 1040nr On Form 1099-DIV, a nondividend distribution will be shown in box 3. How to fill 1040nr If you do not receive such a statement, you report the distribution as an ordinary dividend. How to fill 1040nr Basis adjustment. How to fill 1040nr   A nondividend distribution reduces the basis of your stock. How to fill 1040nr It is not taxed until your basis in the stock is fully recovered. How to fill 1040nr This nontaxable portion is also called a return of capital; it is a return of your investment in the stock of the company. How to fill 1040nr If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first. How to fill 1040nr   When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain. How to fill 1040nr Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. How to fill 1040nr See Holding Period in chapter 14. How to fill 1040nr Example. How to fill 1040nr You bought stock in 2000 for $100. How to fill 1040nr In 2003, you received a nondividend distribution of $80. How to fill 1040nr You did not include this amount in your income, but you reduced the basis of your stock to $20. How to fill 1040nr You received a nondividend distribution of $30 in 2013. How to fill 1040nr The first $20 of this amount reduced your basis to zero. How to fill 1040nr You report the other $10 as a long-term capital gain for 2013. How to fill 1040nr You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years. How to fill 1040nr Liquidating Distributions Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. How to fill 1040nr These distributions are, at least in part, one form of a return of capital. How to fill 1040nr They may be paid in one or more installments. How to fill 1040nr You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. How to fill 1040nr For more information on liquidating distributions, see chapter 1 of Publication 550. How to fill 1040nr Distributions of Stock and Stock Rights Distributions by a corporation of its own stock are commonly known as stock dividends. How to fill 1040nr Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. How to fill 1040nr Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return. How to fill 1040nr Taxable stock dividends and stock rights. How to fill 1040nr   Distributions of stock dividends and stock rights are taxable to you if any of the following apply. How to fill 1040nr You or any other shareholder have the choice to receive cash or other property instead of stock or stock rights. How to fill 1040nr The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. How to fill 1040nr The distribution is in convertible preferred stock and has the same result as in (2). How to fill 1040nr The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders. How to fill 1040nr The distribution is on preferred stock. How to fill 1040nr (The distribution, however, is not taxable if it is an increase in the conversion ratio of convertible preferred stock made solely to take into account a stock dividend, stock split, or similar event that would otherwise result in reducing the conversion right. How to fill 1040nr )   The term “stock” includes rights to acquire stock, and the term “shareholder” includes a holder of rights or of convertible securities. How to fill 1040nr If you receive taxable stock dividends or stock rights, include their fair market value at the time of distribution in your income. How to fill 1040nr Preferred stock redeemable at a premium. How to fill 1040nr   If you hold preferred stock having a redemption price higher than its issue price, the difference (the redemption premium) generally is taxable as a constructive distribution of additional stock on the preferred stock. How to fill 1040nr For more information, see chapter 1 of Publication 550. How to fill 1040nr Basis. How to fill 1040nr   Your basis in stock or stock rights received in a taxable distribution is their fair market value when distributed. How to fill 1040nr If you receive stock or stock rights that are not taxable to you, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550 for information on how to figure their basis. How to fill 1040nr Fractional shares. How to fill 1040nr    You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. How to fill 1040nr However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. How to fill 1040nr Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. How to fill 1040nr Report this transaction on Form 8949, Sales and Other Dispositions of Capital Assets. How to fill 1040nr Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate. How to fill 1040nr    Report these transactions on Form 8949 with the correct box checked. How to fill 1040nr   For more information on Form 8949 and Schedule D (Form 1040), see chapter 4 of Publication 550. How to fill 1040nr Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). How to fill 1040nr Example. How to fill 1040nr You own one share of common stock that you bought on January 3, 2004, for $100. How to fill 1040nr The corporation declared a common stock dividend of 5% on June 29, 2013. How to fill 1040nr The fair market value of the stock at the time the stock dividend was declared was $200. How to fill 1040nr You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. How to fill 1040nr You figure your gain or loss as follows: Fair market value of old stock $200. How to fill 1040nr 00 Fair market value of stock dividend (cash received) +10. How to fill 1040nr 00 Fair market value of old stock and stock dividend $210. How to fill 1040nr 00 Basis (cost) of old stock after the stock dividend (($200 ÷ $210) × $100) $95. How to fill 1040nr 24 Basis (cost) of stock dividend (($10 ÷ $210) × $100) + 4. How to fill 1040nr 76 Total $100. How to fill 1040nr 00 Cash received $10. How to fill 1040nr 00 Basis (cost) of stock dividend − 4. How to fill 1040nr 76 Gain $5. How to fill 1040nr 24 Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain. How to fill 1040nr Scrip dividends. How to fill 1040nr   A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. How to fill 1040nr The certificate is generally nontaxable when you receive it. How to fill 1040nr If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the portion of your basis in the corporation's stock allocated to the certificate. How to fill 1040nr   However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. How to fill 1040nr You must include its fair market value in income on the date you receive it. How to fill 1040nr Other Distributions You may receive any of the following distributions during the year. How to fill 1040nr Exempt-interest dividends. How to fill 1040nr   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. How to fill 1040nr Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. How to fill 1040nr Information reporting requirement. How to fill 1040nr   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file a return. How to fill 1040nr This is an information reporting requirement and does not change the exempt-interest dividends to taxable income. How to fill 1040nr Alternative minimum tax treatment. How to fill 1040nr   Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. How to fill 1040nr See Alternative Minimum Tax (AMT) in chapter 30 for more information. How to fill 1040nr Dividends on insurance policies. How to fill 1040nr    Insurance policy dividends the insurer keeps and uses to pay your premiums are not taxable. How to fill 1040nr However, you must report as taxable interest income the interest that is paid or credited on dividends left with the insurance company. How to fill 1040nr    If dividends on an insurance contract (other than a modified endowment contract) are distributed to you, they are a partial return of the premiums you paid. How to fill 1040nr Do not include them in your gross income until they are more than the total of all net premiums you paid for the contract. How to fill 1040nr Report any taxable distributions on insurance policies on Form 1040, line 21. How to fill 1040nr Dividends on veterans' insurance. How to fill 1040nr   Dividends you receive on veterans' insurance policies are not taxable. How to fill 1040nr In addition, interest on dividends left with the Department of Veterans Affairs is not taxable. How to fill 1040nr Patronage dividends. How to fill 1040nr   Generally, patronage dividends you receive in money from a cooperative organization are included in your income. How to fill 1040nr   Do not include in your income patronage dividends you receive on: Property bought for your personal use, or Capital assets or depreciable property bought for use in your business. How to fill 1040nr But you must reduce the basis (cost) of the items bought. How to fill 1040nr If the dividend is more than the adjusted basis of the assets, you must report the excess as income. How to fill 1040nr   These rules are the same whether the cooperative paying the dividend is a taxable or tax-exempt cooperative. How to fill 1040nr Alaska Permanent Fund dividends. How to fill 1040nr    Do not report these amounts as dividends. How to fill 1040nr Instead, report these amounts on Form 1040, line 21; Form 1040A, line 13; or Form 1040EZ, line 3. How to fill 1040nr How To Report Dividend Income Generally, you can use either Form 1040 or Form 1040A to report your dividend income. How to fill 1040nr Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. How to fill 1040nr Report qualified dividends on line 9b of Form 1040 or Form 1040A. How to fill 1040nr If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. How to fill 1040nr See Exceptions to filing Form 8949 and Schedule D (Form 1040) in chapter 16. How to fill 1040nr If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. How to fill 1040nr You cannot use Form 1040EZ if you receive any dividend income. How to fill 1040nr Form 1099-DIV. How to fill 1040nr   If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. How to fill 1040nr Even if you do not receive Form 1099-DIV, you must report all your dividend income. How to fill 1040nr   See Form 1099-DIV for more information on how to report dividend income. How to fill 1040nr Form 1040A or 1040. How to fill 1040nr    You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or You received, as a nominee, dividends that actually belong to someone else. How to fill 1040nr If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III. How to fill 1040nr   List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. How to fill 1040nr If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. How to fill 1040nr If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited. How to fill 1040nr   Enter on line 6 the total of the amounts listed on line 5. How to fill 1040nr Also enter this total on line 9a of Form 1040A or 1040. How to fill 1040nr Qualified dividends. How to fill 1040nr   Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. How to fill 1040nr The amount in box 1b is already included in box 1a. How to fill 1040nr Do not add the amount in box 1b to, or substract it from, the amount in box 1a. How to fill 1040nr   Do not include any of the following on line 9b. How to fill 1040nr Qualified dividends you received as a nominee. How to fill 1040nr See Nominees under How to Report Dividend Income in chapter 1 of Publication 550. How to fill 1040nr Dividends on stock for which you did not meet the holding period. How to fill 1040nr See Holding period , earlier under Qualified Dividends. How to fill 1040nr Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. How to fill 1040nr Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. How to fill 1040nr Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. How to fill 1040nr   If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. How to fill 1040nr Enter qualified dividends on line 2 of the worksheet. How to fill 1040nr Investment interest deducted. How to fill 1040nr   If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. How to fill 1040nr Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. How to fill 1040nr This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. How to fill 1040nr For more information about the limit on investment interest, see Investment expenses in chapter 23. How to fill 1040nr Expenses related to dividend income. How to fill 1040nr   You may be able to deduct expenses related to dividend income if you itemize your deductions on Schedule A (Form 1040). How to fill 1040nr See chapter 28 for general information about deducting expenses of producing income. How to fill 1040nr More information. How to fill 1040nr    For more information about how to report dividend income, see chapter 1 of Publication 550 or the instructions for the form you must file. How to fill 1040nr Prev  Up  Next   Home   More Online Publications
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Home Office Deduction

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If you use part of your home for business, you may be able to deduct expenses for the business use of your home. The home office deduction is available for homeowners and renters, and applies to all types of homes. 

Simplified Option

For taxable years starting on, or after, January 1, 2013 (filed beginning in 2014), you now have a simpler option for computing the business use of your home (IRS Revenue Procedure 2013-13, January 15, 2013). The standard method has some calculation, allocation, and substantiation requirements that are complex and burdensome for small business owners. This new simplified option can significantly reduce recordkeeping burden by allowing a qualified taxpayer to multiply a prescribed rate by the allowable square footage of the office in lieu of determining actual expenses.

Regular Method

Taxpayers using the regular method (required for tax years 2012 and prior), instead of the optional method, must determine the actual expenses of their home office. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Generally, when using the regular method, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.

Requirements to Claim the Deduction

Regardless of the method chosen, there are two basic requirements for your home to qualify as a deduction:

1. Regular and Exclusive Use.

You must regularly use part of your home exclusively for conducting business. For example, if you use an extra room to run your business, you can take a home office deduction for that extra room.

2. Principal Place of Your Business.

You must show that you use your home as your principal place of business. If you conduct business at a location outside of your home, but also use your home substantially and regularly to conduct business, you may qualify for a home office deduction. For example, if you have in-person meetings with patients, clients, or customers in your home in the normal course of your business, even though you also carry on business at another location, you can deduct your expenses for the part of your home used exclusively and regularly for business. You can deduct expenses for a separate free-standing structure, such as a studio, garage, or barn, if you use it exclusively and regularly for your business. The structure does not have to be your principal place of business or the only place where you meet patients, clients, or customers.

Generally, deductions for a home office are based on the percentage of your home devoted to business use. So, if you use a whole room or part of a room for conducting your business, you need to figure out the percentage of your home devoted to your business activities.

Additional tests for employee use. If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. You must meet the tests discussed above plus:

  • Your business use must be for the convenience of your employer, and
  • You must not rent any part of your home to your employer and use the rented portion to perform services as an employee for that employer.

If the use of the home office is merely appropriate and helpful, you cannot deduct expenses for the business use of your home.

For a full explanation of tax deductions for your home office refer to Publication 587, Business Use of Your Home. In this publication you will find:

  • Requirements for qualifying to deduct expenses (including special rules for storing inventory or product samples).
  • Types of expenses you can deduct.
  • How to figure the deduction (including depreciation of your home).
  • Special rules for daycare providers.
  • Tax implications of selling a home that was used partly for business.
  • Records you should keep
  • Where to deduct your expenses (including Form 8829, Expenses for Business Use of Your Home (PDF), required if you are self-employed and claiming this deduction using the regular method).

The rules in the publication apply to individuals.

Page Last Reviewed or Updated: 03-Feb-2014

The How To Fill 1040nr

How to fill 1040nr Index Symbols $10,000, pagos en efectivo en exceso de, Introducción A Asistencia (see Ayuda con los impuestos) Ayuda (see Ayuda con los impuestos) Ayuda con los impuestos, Cómo Obtener Ayuda con los Impuestos D Defensor del Contribuyente, Servicio del Defensor del Contribuyente. How to fill 1040nr F Formulario, ¿Quién tiene que presentar el Formulario 8300-SP? 8300-SP, ¿Quién tiene que presentar el Formulario 8300-SP? I Información adicional (see Ayuda con los impuestos) Informe de pagos en efectivo en exceso de $10,000, Introducción P Publicaciones (see Ayuda con los impuestos) Q Qué Hay de Nuevo, Qué Hay de Nuevo S Servicios gratuitos para los impuestos, Servicios gratuitos para los impuestos. How to fill 1040nr T Transacciones en efectivo en exceso de $10,000, Introducción Prev  Up     Home   More Online Publications