This is how I understand the dividends bit of form 2047 works:

Line 201: insert name of country of origin of the dividend

Line 202: insert Euro equivalent of the net dividend amount you received

Line 203: look up the notes to form 2047 to find the relevant percentage for dividends, e.g. for the US and the UK it is 17.7%

Line 204: net dividend amount (line 202) multiplied by the relevant percentage in line 203 (e.g. multiply by 0.177 for the US or the UK)

Line 205: insert amount of foreign tax paid (or deemed to be paid, e.g. if there is a tax credit as with most UK dividends) on the dividend

Line 206: insert the amount in line 204 or the amount in line 205, whichever is lower

Line 207: add up the total net amount of all dividends (total of everything in line 202) + total tax credits (total of everything in line 206)​

The total tax credits (taken from line 206) gets used in box 8TA on form 2042. The number you insert in line 207 (total dividends + tax credits) gets used in box 2DC on form 2042.

 

Line 201 is for dividends eligible for "abattement" de 40%. I've been using the line 211...

I also am wondering if it's not double entry to fill out section 2 and 6/7. When I do this online, it appears to double-count the calculated tax credit.

 

Thanks Patchy,

I do not have a figure to put for line 205. There is nothing noted on my dividend paper that says about tax. My US tax declaration is due June 15 and it looks like I will not owe any money to the US.

For form 2042 I cannot put anything down in box 8TA since I have no idea about the tax.

What about box 8TK, I thought I read somewhere that that is where I put the figure.

 

If there is no tax withheld from the dividend, then just leave line 205 blank.

It may be a bit late, but you might want to look into downloading a tax preparation software like Click Impots ClickImpôts (It's the only one I'm aware of here in France, but there may well be others.) Though you do have to know a bit about how the tax forms work, the program does include some pretty inclusive manuals on French taxes.

I've been so busy filling in the "sub forms" on the software that I hadn't noticed until just recently how much the form 2047 has changed for this year. But they do have far more intuitive sub forms for things like foreign dividends and the program slaps the various amounts into the appropriate lines and boxes on the forms for you.
Cheers,
Bev

 

Thanks Bev, let's just say I am having a mild nervous breakdown trying to figure this out and I'm blocking everything out. I just sent in my US tax declaration after going through the same thing, and those declarations are in English, so trying to figure out what the French declaration says is getting to me.

 

I think I have it figured out, but not quite sure. Could some one tell me if I am correct.

On Form 2047, I fill out Nos. 201, 202 and 207 for dividends.
Then Nos. 221, 222, 228 and 230 for interest.
Then Section 6 on page 4.

On Form 2042 I check box 8UU. I then put the amount from Section 6 of form 2047 into the box 8TK on form 2042.

What I'm not too sure about are lines 2DC and 2TR on form 2042. I guess I put the amounts down from form 2047 but the box is not big enough to say these are foreign sums, or do I just include them with the French sums I already have in that box.

Thanks

 

What I'm not too sure about are lines 2DC and 2TR on form 2042. I guess I put the amounts down from form 2047 but the box is not big enough to say these are foreign sums, or do I just include them with the French sums I already have in that box.

Thanks

Just include them with the French amounts (which may already be pre-printed if your bank has reported them to the Fisc). The 2047 form merely details the foreign part of any and all amounts reported on the 2042, so no need to annotate the main form.
Cheers,
Bev

 

Thanks Bev, that's what I thought, but wasn't entirely sure.

 

I've been looking around some more, frantically, and found:
The abattement applies to individual stocks, but not mutual funds, which would be treated in the second section of page 2.
For income getting a credit equal to tax paid elsewhere, the dividends and interest are not re-entered in section 7. For income getting a credit equal to the French tax, it is re-entered in section 6.
Now, my remaining question is: if, after US exemptions and deductions, we are not taxable in the US, how does that affect the tax credit in France??? (difference b/w "impot perçu, impot acquitté, et impot supporté) Anyone? TIA

 

Now, my remaining question is: if, after US exemptions and deductions, we are not taxable in the US, how does that affect the tax credit in France??? (difference b/w "impot perçu, impot acquitté, et impot supporté) Anyone? TIA

Frankly your taxability or no in the US has little or no relevance on your French return. On your US returns, the method for avoiding double taxation is that of the tax credit (i.e. you credit French income tax paid against any US tax liability you run up). The method for avoiding double taxation in France is the "tax credit at the rate of the French tax incurred" - which is without regard for the tax you did or didn't pay in the US.
Cheers,
Bev

 

Ah...but when I enter the net dividend paid, I'm currently calculating it, assuming a 15% tax rate, since I don't have anything deducted at the front-end. Is that correct?

 

The French Fisc assumes a 15% tax on dividends, whether or not that was deducted or actually paid. Let the Fisc do their job.
Cheers,
Bev

 

Great - I think I can finally finish my filing tomorrow! Thank-you!

 

I was awake at 4:30 this morning, still mulling over this form... Here is how I currently understand it:
Lines 200-207 are for non-US citizens with individual stock dividends
Lines 210-219 are for non-US citizens with other dividends (eg. mutual funds)
Lines 220-228 are for non-US citizens with interest
These lines calculate a tax credit equal to what would've been paid in the US. The net amount and assumed tax are based on the 15% rate, regardless of whether you were taxable.

Section 6 is for US citizens with income, and is for calculating a tax credit equal to the French tax on this income.

Section 7 is for non-US citizens with income other than dividends and interest, where the tax credit is equal to the amount paid in the US.

Does this sound right?

Any idea how to treat capital gains distributions? Years ago, the French tax office told me that if I didn't actually have capital gains, then I didn't need to include them. I liked that answer, but it still doesn't seem quite right!

Since my husband is French, we'll need to split up the income into these different categories. We hadn't before. Every year, I anguish over this form, and find new ways to interpret the instructions. I think I've been doing it wrong for some time, but am determined to get it right eventually!

 

I think you're overthinking this. If you have interest and/or dividend income from overseas, it should be included in Section 2 under the appropriate heading. It doesn't matter if you're a US citizen or not. Then, you report them again in section 6, 7 or 8, depending on their treatment under the relevant tax treaty. (Since you're dealing with US taxes, you're basically concerned with section 6 - which is the method for avoiding double taxation referred to in the treaty.) And, as the instructions say, don't forget to carry the amount from section 6 over to box 8TK on the main form (2042).
Cheers,
Bev

 

Oooohhhhh.....OK. NOW I get it. Yes, I was overthinking it a little. I just didn't want to over-report income. I am going to have to split it up a little, since some income is in my name (US citizen), and some is in my husband's name (French citizen). Would you know about the capital gains distributions? I'm happy to continue doing what the tax office told me, but I seriously doubt that it's right. Thanks again for your help.

 

You previously stated

Years ago, the French tax office told me that if I didn't actually have capital gains, then I didn't need to include them. I liked that answer, but it still doesn't seem quite right!

How would you report capital gains that you don't have????

 

The French form 2047 is actually quite handy in that you are supposed to identify on the form on sections 6, 7 and 8 which declarant the income belongs to (declarant 1 or declarant 2, depending on which order you put your names on your 2042 form).

It's a bit late for this year, but you may want to consider getting something like ClickImpot next year. It takes a bit of fiddling with the first time through, but I just love how it asks you for the information and then puts all the appropriate amounts on all the appropriate lines and forms for you. (Have learned LOTS about the system simply by playing with the software.)

You say you have capital gain distributions - what kind of account is that on? A money market type fund or perhaps an IRA or 401K? I only ask because if it's an IRA or 401K, there's nothing to report. Both types of fund are treated like retirement plans, thanks to the US-France tax treaty. If it's a money market type of fund, I think you may wind up reporting all distributions kind of like "assurance vie" accounts - though I'm not sure of that. Do you report the fund that is doing the capital gain distributions as a "foreign assurance vie"?

I only mention it because my husband has a couple of investment accounts that report various types of income (including capital gains). At year-end because these are French funds, we just get a statement that says how much to report on which lines of the 2042 - mostly in section 2, which is where the capital gains go. Still, on re-checking the 2047 form, I don't see anything about "plus-values" (which are capital gains) so perhaps the tax official is correct - you don't report them here.
Cheers,
Bev

 

No, they're not IRAs or 401ks (I don't don't report those.) The CG distributions are just from regular stock mutual funds. Nothing to do with assurance vie. From talking with the tax official, I wasn't even absolutely sure he/she knew what CG distributions were! Do they not exist in France??? I may very well look into ClickImpot for next year. I feel like I am reinventing the wheel every single year, trying to understand the logic and mechanics behind the filing. Unless you can advise me where to stash the distributions, I guess I'll just keep ignoring them!

 

If you're feeling a bit masochistic, it's Article 13 in the treaty that deals with "Gains en capital." From what I read quickly, capital gains seem to be taxable in the country in which the asset is based with a couple technical-type exceptions. If you decide to take on reading the treaty, download the French version from the Fisc website. If you get the treaty from the IRS site in English, you have to cut and paste the original plus two or three revisions. Why the IRS couldn't put together a nice, consolidated version like the French have done, I have no idea.
Cheers,
Bev

 

Well, just for the heck of it, I did look at Article 13, and can't see that it addresses distributions. I guess I'm good! Thanks again for your help.

Jennifer

 

Me again ;-p, up at 3:30am. Something was still niggling me about this form. On re-reading the instructions, specifically p.6 for the US income, I finally hit on THE paragraph I needed: "When the tax credit is equal to the French tax (eg. for US citizens residing in France), US GROSS income should be mentioned on line 222 and lines 223 and 224 should be left blank." Voila! The US has to be different from every other country... This is what helps to avoid the double tax credit, I believe. Now to split out the income in my husband's name!