Australian Dividends

[calcpa5]

Many Australian dividends are considered "franked" dividends. This means that a dividend paid by an Australian company has attached to that dividend a tax credit of the amount the company paid on the income. For example, a company pays a $700 dividend and attaches a $300 tax credit (for taxes the company already paid on the income) for total reportable dividend income of $1,000.

Can a US resident claim $1,000 of dividend income and claim a $300 tax credit from Australia in this instance, effective raising the dividend yield by 30% plus 15% of the income being sheltered?

[JAinNC]

The Taxpayer's 1099-DIV issued by the company would show any foreign taxes paid that may be used in filing the 1040. Either a Sch A deduction OR a foreign tax credit may be taken.

[erchess]

Why would

a company in Australia issue a 1099-Div or any other US Tax Form?

[WhiteOleander]

The way I would read that is the person added an add'l 300 into income. They did not pay 300 in tax. So, you would have to determine how much TAX was paid. And then claim the foreign tax credit.

[JAinNC]

a company in Australia issue a 1099-Div or any other US Tax Form?

I don't know why, but as a US resident, if the dividend was paid to that person, it does seem they would receive a statement of some type.

I have (and several clients who receive) dividends from a foreign company, Reports are issued from those companies to me and my clients. Japan, Germany, Canada - these are not held in a portfolio of an investment firm, but directly owned by the individuals. ( Some come with English traslations)

Perhaps I read the question wrong. I did use the term 1099-DIV when I should not have.

Jeannie