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(I'm new here, so if this has been addressed multiple times, please feel free to direct me to the right thread.)

I'm trying to report information from a T3 on my US taxes. I don't understand what box 25 and 42 are.

The description for box 25 says "Foreign non business income"
The description for box 42 says "Amount resulting in cost basis adjustment -This amount represents a distribution or return of capital from the trust."

Do I add box 25 to the amount in box 50 "taxable amount of eligible dividends" and report it all as dividends?

Do I do anything with the amount in box box 42?

:confused:
 

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A T-3 is a Canadian tax information slip. It has absolutely nothing to do with US taxes. Don't send them (or even copies of them) to the IRS and don't worry about all the little boxes. Canadian tax slips with their boxes mean something to the CRA but are utter gibberish to the IRS.

It is better to just take your basic income information as shown on your Canadian tax return and insert it into the appropriate lines on your US 1040. For dividends you report the "actual" amount, not the "taxable" amount (which is part of figuring the dividend tax credit for your Canadian return). That part of filling out a US return is relatively easy; the ridiculous additional US information forms are the hardest part.

By the way, return of capital is not income. You shouldn't add it to something that is. If you do, you'll wind up paying tax a second time on income you have already paid tax on. It merely lowers your cost basis (which you should keep track of for both Canadian and US taxes).
 
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