# Australian shares on US taxes



## beebo (Feb 21, 2014)

Good evening all,
I'm trying to get my head around declaring my Australian shares on my US tax return.
From 2015, all of my Australian income is bank interest, share dividends deposited into a bank account and the dividend re-investment plan. I understand that all of this needs to be declared. 
I'm using TurboTax Deluxe and I'm just finding it a bit messy here.
I've declared my bank interest on 1099-INT and the share income & reinvestments on 1099-DIV. For 1099-DIV I have used amounts in the Franked & Unfranked sections of my dividend distribution reports. Now here's where I am stuck. Aside from filing FinCen, is this all I need to do now? Do I claim any tax or franking credits anywhere on 1099-DIV? I understand I can't claim any foreign tax credit as I didn't have any wages or other income.
(My Australian tax returns each year generate a refund for me as my share credits outweigh the taxes, I'm guessing none of these credits can be applied to my US return?)
Thanks in advance for your help.


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## BBCWatcher (Dec 28, 2012)

I'm not familiar with TurboTax Deluxe specifically, but note that you are (presumably) not receiving 1099s. So, in general, you should not be pretending you are -- tax preparation software _generally_ doesn't make you pretend, at least not in this way. Instead the tax preparation software should have some semi-separate or completely separate path for declaring and characterizing that foreign income. Looking through TurboTax's support forums, I see a discussion that TurboTax has a "Foreign Accounts" selection available in their Income->Interest and Dividends section, and that's where you would report such income. Does that look like anything you're seeing?

With respect to the Foreign Tax Credit, let the tax preparation software figure that out for you. It is possible (unusual, but possible) to qualify for an FTC on _particular_ income even if your total effective foreign tax rate is zero or negative. You do not need earned income to qualify for the FTC.

It's possible some of what you're holding triggers PFIC (Passive Foreign Investment Company) rules, so just pay attention to that just in case.


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## Bevdeforges (Nov 16, 2007)

Just one caveat - in the past, when using tax preparation software, it has been necessary to fill out a "dummy" 1099 to report certain types of foreign income. The 1099 forms aren't submitted with the tax return and in some applications, may be the only way to enter information about investment income. I don't know for sure about Turbo Tax, but look for an alternative for "foreign" investment income before you resort to dummying up a 1099. However, if there is no other way to do it, don't worry about filling in all the address detail - just indicate the type and amount of income with the name of the investment (for your own reference).
Cheers,
Bev


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## beebo (Feb 21, 2014)

Thanks BBC and Bev for your replies.
There is indeed a foreign accounts section in Income->Interest and Dividends. As you work through it and input your interest, dividends etc it also says that you need to report this in the appropriate income, deduction or credit area of Turbotax. Hence the dummy 1099s.
Another question, in this foreign accounts section in Income->Interest and Dividends, you have Interest, Dividends, Royalties and Other Income on one side of the page, and Gains / (Losses), Deductions and Credits on the other side. If you just report bank interest and stock dividends (through the reinvestment plan and through dividends paid in cash) then there is no need to put anything on the other side under Gains / (Losses) correct? This is only for share sales and capital gains / losses? What about Deductions and Credits? Is this for any tax paid?
Thanks


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