ddl[at]danlan.*com (Dan Lanciani) wrote:

- quote -

No

You may do this only if the taxes payable exceed the treaty
withholding rate. If you are entitled to some back, you can
only the claim the amount payable.

That being said, there are those who will use the amounts
withheld as as amounts paid. They are gambling that the
taxing authority will not catch this.

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<DRS.Use...[at]sengsational.com> wrote:
- quote -

If JPMorgan do it, then I can well imagine that it might
cost a couple of hundred dollars. Otherwise it should not
cost you anything, apart from your time and some postage.
There may even be special simplified forms for reclaiming
excess tax withheld.

The more important point is that you can only deduct or take
credit for foreign tax that you actually owe, not tax that
was withheld and you could not be bothered to reclaim, so
you need to calculate your foreign tax liability anyway.

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"Dan Lanciani" <ddl[at]danlan.*com> wrote:
- quote -

Some Canadian "taxes" withheld from payments to U.S.
residents, e.g. pension, RRSP, and, for just a while longer,
interest, constitute "payment in lieu" of income tax, i.e.
the recipient's final obligation to the Canadian government
on account of the payment. My understanding is that U.S.
residents are able to use these amounts as "Foreign tax
paid" when filing their U.S. tax returns. (i.e. credits
indirectly applied to the U.S. tax owing for that income).
There is some provision for such tax payers to file certain
documents with the Canada Revenue Agency which would result
in the source payers reducing the amounts withheld. However,
in my experience, it's often better for the U.S. resident
involved to claim the Foreign "Tax" paid as a credit then to
go through the extensive rigmarole that a Canadian Sec. 217
return entail. YMMV, though. These comments only reflect my
personal observations.

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DRS.Usenet[at]sengsational.com (DRS.Usenet[at]sengsational.com) writes:
- quote -

That brings me back to my other question. Are you allowed
a credit for foreign taxes that were withheld even though
you might not have owed them and possibly could have had
some of them refunded had you done the paper work?

Dan Lanciani
ddl[at]danlan.*com

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ddl[at]danlan.*com (Dan Lanciani) wrote:

- quote -

Dan, I called JPMorgan, who manages my ADR's and they said
it would cost one or two hundred dollars in fees to various
different entities to file for a refund, and even then you
could only get back 3%. So getting a refund was a
non-starter for my chump-change investment.

On Aug 20, 7:30 pm, wpa...[at]aol.com (BillPatch) wrote:

- quote -

Thanks for the confirmation Bill. I guess I'll stick with
these ADR's for a while longer.

--Dale--

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DRS.Usenet[at]sengsational.com (DRS.Usenet[at]sengsational.com) writes:
- quote -

A related question: is foreign tax withheld the same as
foreign tax paid? Or does the withholding suggest that I
should really be filing some kind of tax return with the
foreign jurisdiction, computing a tax and possibly paying
more than was withheld _or_ even getting a refund? When a
fund reports foreign tax paid on a 1099 I assume they have
in fact paid the correct tax, but when a broker withholds
foreign tax on a stock dividend how can they know my actual
foreign tax liability unless some simplifying treaty
specifies a fixed percentage?

- quote -

I had Lucent which became Lucent-Alcatel ADR thus prompting
the broker to withhold foreign tax on the last dividend.
This was in a Roth IRA. Is any deduction or credit
available to me?

Dan Lanciani
ddl[at]danlan.*com

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"DRS.Use...[at]sengsational.com" wrote:

- quote -

Dale,

Yes, it's all a wash.

Bill Patch

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It sounds to me for a small amount (< $300) of foreign taxes
being withheld annually, it's no big deal to an individual
investor since you get a dollar-for-dollar credit right on
the 1040, but I'd like to get confirmation on this. What
I'm suggesting is that in this case, although some of my
money ends-up in Spain*, it's not going to effect the amount
of money I fork over, correct?

--Dale--

* I started here in the good old US of A with Pacific Power,
which became Pacificorp, which got bought by Scottish Power,
which got bought by Iberdrola. So I'm taking the ADS
European tour without leaving home. I wonder where I'll
end-up next!

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