Publication 17
taxmap/pub17/p17-035.htm#en_us_publink1000171559taxmap/pub17/p17-035.htm#en_us_publink1000171564Foreign-source income.
(p63)If you are a U.S. citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U.S. law. This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign
payer.
taxmap/pub17/p17-035.htm#en_us_publink1000273219This chapter discusses the tax treatment of:
- Ordinary dividends,
- Capital gain distributions,
- Nondividend distributions, and
- Other distributions you may receive from a corporation or a mutual
fund.
This chapter also explains how to report dividend income on your tax
return.
Dividends are distributions of money, stock, or other property paid to you by a
corporation or by a mutual fund. You also may receive dividends through a
partnership, an estate, a trust, or an association that is taxed as a
corporation. However, some amounts you receive that are called dividends are
actually interest income. (See
Dividends that are actually interest under
Taxable Interest
in chapter 7.)
Most distributions are paid in cash (or check). However, distributions can consist of more stock, stock rights, other property, or services.
taxmap/pub17/p17-035.htm#TXMP37ef8e9fUseful items
You may want to see:
Publication 514
Foreign Tax Credit for Individuals 550
Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) :
Interest and Ordinary Dividends taxmap/pub17/p17-035.htm#en_us_publink1000171566This section discusses general rules for dividend income.
taxmap/pub17/p17-035.htm#en_us_publink1000171567Part of a child's 2012 investment income may be taxed at the parent's tax rate. If it is, Form 8615, Tax for Certain Children Who Have Investment Income of More Than $1,900, must be completed and attached to the child's tax return. If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate.
Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose.
For more information about the tax on investment income of children and the parents' election, see
chapter 30.
taxmap/pub17/p17-035.htm#en_us_publink1000171569Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc., from the fiduciary. Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040.
taxmap/pub17/p17-035.htm#en_us_publink1000171570
You must give your name and SSN (or individual taxpayer identification number
(ITIN)) to any person required by federal tax law to make a return, statement,
or other document that relates to you. This includes payers of dividends. If you
do not give your SSN or ITIN to the payer of dividends, you may have to pay a
penalty.
taxmap/pub17/p17-035.htm#en_us_publink1000171572Your dividend income is generally not subject to regular withholding. However, it may be subject to backup withholding to ensure that income tax is collected on the income. Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding
rate.
Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. For more information, see
Backup Withholding in chapter 4.
taxmap/pub17/p17-035.htm#en_us_publink1000171574If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law.
taxmap/pub17/p17-035.htm#en_us_publink1000171575Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. Keep this form with your records. You do not have to attach it to your tax return.
taxmap/pub17/p17-035.htm#en_us_publink1000171576Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. For example, you may receive distributive shares of dividends from partnerships or S corporations. These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc., and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits,
etc.
taxmap/pub17/p17-035.htm#en_us_publink1000171577If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld.
taxmap/pub17/p17-035.htm#en_us_publink1000171578If someone receives distributions as a nominee for you, that person will give you a Form 1099-DIV, which will show distributions received on your
behalf.
taxmap/pub17/p17-035.htm#en_us_publink1000171579Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. See
Reporting Substitute Payments
under
Short Sales
in chapter 4 of Publication 550 for more information about reporting these
payments.
taxmap/pub17/p17-035.htm#en_us_publink1000171580If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. The new Form 1099 you receive will be marked "Corrected."
taxmap/pub17/p17-035.htm#en_us_publink1000171581If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income.
taxmap/pub17/p17-035.htm#en_us_publink1000171582If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. You report the dividend in the year it was declared.