Zero DNI and Withholding taxes on foreign dividends


N

NoClue

Distribution was made to a trust's sole beneficiary. The trust's
expenses far exceeds its investment income -- no DNI and no taxable
income on K-1.

The investment income includes some dividends from ADRs and taxes were
withheld at source on those dividends. Does those w/o taxes get
passed onto the beneficiary?

TIA
 
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A

Alan

Distribution was made to a trust's sole beneficiary. The trust's
expenses far exceeds its investment income -- no DNI and no taxable
income on K-1.

The investment income includes some dividends from ADRs and taxes were
withheld at source on those dividends. Does those w/o taxes get
passed onto the beneficiary?

TIA
See the K-1 instructions for Line 14b, Foreign taxes
 
N

NoClue

On 3/23/11 9:52 AM, NoClue wrote:> Distribution was made to a trust's sole beneficiary. The trust's



See the K-1 instructions for Line 14b, Foreign taxes
Sorry, I wan't clear. I meant should the Foreign taxes be put on line
14b at all -- since there is no taxable income from the distribution?

TIA
 
A

Alan

Sorry, I wan't clear. I meant should the Foreign taxes be put on line
14b at all -- since there is no taxable income from the distribution?

TIA
If you are going to pass dividend income to the beneficiary, you should
pass the foreign taxes paid on those dividends to the beneficiary. So
the answer is Yes.
 
N

NoClue

If you are going to pass dividend income to the beneficiary, you should
pass the foreign taxes paid on those dividends to the beneficiary. So
the answer is Yes.
There were dividend income; and the expenses exceeds the income.
So , on the K-1, income is $0.
In 2010, the distribution to the beneficiary is more than the gross
income of the trust. Under this scenario, is the dividend income
considered to be passed on to the beneficiary?

Some of the dividends were from ADRs; and foreign taxes were
withheld. Should the foreign taxes be put on K-1, line 14 ??
 
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A

Alan

There were dividend income; and the expenses exceeds the income.
So , on the K-1, income is $0.
In 2010, the distribution to the beneficiary is more than the gross
income of the trust. Under this scenario, is the dividend income
considered to be passed on to the beneficiary?

Some of the dividends were from ADRs; and foreign taxes were
withheld. Should the foreign taxes be put on K-1, line 14 ??
I assumed there was an entry on the 1041 Line 2a and 2b allocable to the
beneficiaries and an entry on Line 9 of Schedule B. If not true, then
there is no foreign taxes paid to pass through.
 
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