In misc.taxes.moderated, Alan wrote:

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Thanks.

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In misc.taxes.moderated, Arthur Kamlet wrote:

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Yep. This one was not the "withheld" tax.

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Thanks. That's what I had been thinking, but I hoped otherwise.

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DF2 wrote:
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company trading on U.S. exchanges, you will generally see two
charges when dividends are paid: a dividend fee (sometimes listed
as Admin. Fee) and foreign taxes paid. You report the gross
amount of dividend as that is what will show up on your 1099-DIV.
Assuming you meet the requirement to avoid filing Form 1116, you
can directly deduct the foreign tax paid on the applicable Form
1040 line. The dividend fee is not added to cost basis of the
shares. It is your cost for collecting the dividend and as such
is a misc. itemized deduction. The fee is stipulated in the
Deposit Agreement between the depositary bank and the company.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <n4khg49kth6ip69rjt27r9r1gsf9h23qp6[at]4ax.com> ,
DF2 <replyvia[at]newsgroup_please.com> wrote:
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No, it does not affect basis.

Since this is an ADR, is the $2 a foreign tax that you paid and
is automatically taken from your dividend?

If so, you may be eligible to take a foreign tax credit or
deduct the foreign tax on schedule A. If all your foreign tax
is from passive sources such as dividends, and is less than
$300 (600 MFJ) you simply take the credit on page 2 of Form 1040.

Otherwise you can fill out form 1116 to calculate the amount of
foreign tax credit.


If the $2 fee is not foreign tax withheld, it is a misc 2% investment
expense.
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ArtKamlet at a o l dot c o m Columbus OH K2PZH

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I seem to remember somebody posting that the ADR fees, that the
depositary bank charges when you get a dividend, add to the basis.
Was that correct? I did a lot of searching to try to find that, and
I came up empty.

For example, I get a $90 dividend, and I get charged a $2 fee for
the dividend, netting $88 in cash. $90 is put on the 1099-DIV for
that stock. Is the $2 a miscellaneous investment expense, (and thus
not of use to me) or does it reduce the basis by $2?

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >