# 1040NR Dual-Status question



## CHexpat

I expated in 2015 to Switzerland and I have a question about the *Dual Status *filing That I havent been able to get answered after days of searching the instructions.

I have a small pension that spans both the 1040NR and 1040 portions.
But how to show it and take the $4000 exemption?

Do take the exemption on the 1040?
Do I take the exemption on the 1040NR?
or Both ?

And how do I show it? On both forms there 2 fields, Pension and taxable amount.

The instructions say to use the 1040 as a statement attached to 1040NR showing amount of income on that portion but does that mean I do not have to figure the tax on the 1040?
Or simply transfer it to 1040NR (17a and 17b) and figure the tax there with its Exemption and tax treaty?

Either way I have no tax liability to the US but I just dont know how to file it.

Thanks and ciao


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## Bevdeforges

Have moved you over to the Expat Tax section in the hope of finding you a few responses.
Cheers,
Bev


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## iota2014

Hi - I believe you only put US source income on the 1040NR.

So you put the amount you received up until renunciation on the 1040, and if it's US source you put the amount you received after renunciation on the 1040NR. If it's not US source you put zeroes on the 1040NR

Phil Hodgen has a blog article about this at HodgenLaw PC - International Tax


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## BBCWatcher

CHexpat said:


> I expated in 2015 to Switzerland and I have a question about the *Dual Status *filing That I havent been able to get answered after days of searching the instructions.


Just to clarify, are you saying that you either renounced or documented relinquishment of your U.S. citizenship, and obtained a U.S. Certificate of Loss of Nationality, in 2015? I can't find "expate" in the dictionary. You might have meant "expatriated," but the meaning of that word is ambiguous in this context.


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## CHexpat

iota2014 said:


> Hi - I believe you only put US source income on the 1040NR.
> 
> So you put the amount you received up until renunciation on the 1040, and if it's US source you put the amount you received after renunciation on the 1040NR. If it's not US source you put zeroes on the 1040NR
> 
> Phil Hodgen has a blog article about this at


iota2014
Thanks for the link and help, it has narrowed down the procedure to "porting" the figures from the 1040 to the 1042, but thats the problem - how to do it. Here is what Phil Hodgen had to say;

The way you pipeline your “income earned while I was a citizen” to your Form 1040NR is a bit cumbersome. We prepare a summary page (on a piece of paper) to attach to the Form 1040NR to give guidance to the IRS so they can see where the numbers came from. We also attach a Form 1040 for that part of the year, where the actual
computations are made. Then the numbers are ported from the Form 1040 to the Form 1040NR with, of course, the helpful little guide to the inquisitive IRS agent who wants to know what happened and why.

Am I supposed to compute the 1040 with the exemption or do I do that on the 1040NR ?


Thanks much,


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## CHexpat

BBCWatcher said:


> Just to clarify, are you saying that you either renounced or documented relinquishment of your U.S. citizenship, and obtained a U.S. Certificate of Loss of Nationality, in 2015? I can't find "expate" in the dictionary. You might have meant "expatriated," but the meaning of that word is ambiguous in this context.


I renounced and obtained the CLN in 2015

I understand how to do everything for the tax filings except how to port the numbers from the 1040 to the 1040NR and on which (or both?) form to claim my exemption.

The good news is that between the exemption and the tax treaty I wont owe anything.

Thanks,


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## iota2014

If you renounced in, say, March, put 3/12 of the year's pension on the 1040 and claim 3/12 of the year's exemption.

If it's NOT a US source pension, and you don't have ANY US source income, put zeroes on the 1040NR.

Then write a note explaining what you've done.

That's what I would do. Don't forget the exit tax form.


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## BBCWatcher

OK, the key IRS publication is Publication 519, especially in Chapter 6. In your case your Form 1040 is an exhibit or attachment to your main tax return (Form 1040NR). You should write "Dual-Status Statement" at the top of your 1040 and "Dual-Status Return" at the top of your 1040NR.

TaxAct.com actually knows how to prepare a dual-status return, so you could use TaxAct. It's not free this year, but it'll be only $20 or $30 depending on the types of income you had in 2015.

I found this example describing the mechanics of how to file, but it's the opposite scenario (ending the dual status year as a U.S. resident). But that example is reasonably detailed and should still give you some idea how to "surface" the figures (if indeed they need to be surfaced). Just bear in mind that 1040NR is your actual tax return and 1040 is really just a "worksheet," or an exhibit, that shows how you calculated (zero) tax owed during your U.S. personhood period in 2015. Do not sign 1040 (the "worksheet").

Page 9 in the instructions for Form 1040NR (2015 edition) tells you how to "surface" information from your 1040 worksheet/exhibit/statement. There are two places that figures from 1040 surface to 1040NR: lines 42 and 54. If your tax zeroes out on your 1040 (on line 63 in the 2015 edition), then you would be adding zeroes to whatever the figures otherwise are on Form 1040NR.

Did that answer your question?


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## CHexpat

BBCWatcher said:


> Page 9 in the instructions for Form 1040NR (2015 edition) tells you how to "surface" information from your 1040 worksheet/exhibit/statement. There are two places that figures from 1040 surface to 1040NR: lines 42 and 54. If your tax zeroes out on your 1040 (on line 63 in the 2015 edition), then you would be adding zeroes to whatever the figures otherwise are on Form 1040NR.
> 
> Did that answer your question?


Brilliantly answered, many, many thanks.

You wouldnt happen to know how to valuate a small private ECI pension for the 8854 would you?

Thanks again


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## CHexpat

iota2014 said:


> If you renounced in, say, March, put 3/12 of the year's pension on the 1040 and claim 3/12 of the year's exemption.
> 
> If it's NOT a US source pension, and you don't have ANY US source income, put zeroes on the 1040NR.
> 
> Then write a note explaining what you've done.
> 
> That's what I would do. Don't forget the exit tax form.


Thanks, I wont forget


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## CHexpat

*8854 pension value*



CHexpat said:


> You wouldnt happen to know how to valuate a small private ECI pension for the 8854 would you?


I found a method to value a pension plan with the Probility of Mortality Method at this link

A Primer on Pension Valuation in Divorce

example given for a 65 year old male the formula for a Pension value is
PV = (monthly payment) x 12 x 9.9165 

ciao everyone and thanks again


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