# Report US Non-Dividend Distributions?



## noblesse (Jun 26, 2018)

HI,

I inherited a US mutual fund that holds municipal bonds, and from time to time they 'pay' me Non-Dividend Distributions. Depending on the particular maturity dates of the individual bonds in the funds, these distributions vary in amount and I do not get them regularly.

These are not reportable on my US tax return because they are just a return of cost; the mutual fund is just returning some of the money that was originally invested (and I do pay taxes on the dividends from this fund in both the US and in France).

Given that these distributions are not income, I did not report them on my 2018 Déclaration, and I would prefer not to do so this year, as the amount is almost triple the 2018 amount and I would not like my tax rate to be figured on amount that will most likely be much lower next year.

Is it OK not to report them, or is there somewhere I can report them that would not lead to an increase in my tax rate?


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## Bevdeforges (Nov 16, 2007)

If these distributions are considered a refund of the capital paid in, I wouldn't bother to report them. (Basically, you're treating them for French taxes the same way you are treating them for your US taxes.)

There's basically no way for the Fisc to know about the payments, but even if they did find them out, you can explain that you're treating them in the same manner as for US taxes. I'm not sure French tax law covers all the various types of investments in countries all over the world, but at the very least, you would have an excellent case for "non-willfulness" (i.e. you're not trying to avoid taxes) if it's ever questioned.

If in doubt, you want to be able to prove your "good faith" in reporting these sorts of "peculiar" sums in a logical and rational manner. (Or NOT reporting them based on some reasonable explanation.)


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## noblesse (Jun 26, 2018)

Thanks, Bev.

That's what I thought (and why I didn't declare them last year) but it's best to be 'sure'!


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