Check out some similar questions!

shawnk71 · May 2, 2006, 09:35 PM

Hello, I am a Canadian citizen. I worked in the US for 3 years until Oct 2004. While I was US, I opened up a US brokerage account. For the 2004 taxes, I filled out a 1040. For 2005, I was considered a resident of Japan, however, I did not fill out the W8-BEN for 2005 (I did at the beginning of 2006).

I know that I have to fill out 1040NR for 2005, however, should I receive a 1099 and/or 1042-s for 2005 (since I didn't not fill out W8-BEN) from my US brokerage company?

Also, through the US brokerage account (in 2005, while resident of Japan), I made capital gains on stocks and dividends on mutual funds. Are these "income effectively connected with US trade/business" (fill in lines 10a, 10b, 14 in 1040NR) or is this "income NOT effectively connected with US trade/business" (fill in line 75a, 75b and 83 in 1040NR).

Thank you!
Shawn

AtlantaTaxExpert · May 3, 2006, 09:32 AM

Shawn:

I believe that this is "income NOT effectively connected with US trade/business" (fill in line 75a, 75b and 83 in 1040NR)."

You should receive a Form 1099-DIV from the brokerage firm, however. If not, call the firm and ask them to send you one.

taxsearcher · May 4, 2006, 08:17 PM

Your capital gains would be foreign source. The dividends would be US source. This is not effectively connected income.

I'm assuming you were NR and not living in the US during this time (ie not a student on F1).

shawnk71 · May 7, 2006, 08:59 AM

Thank you very much for the reply!
Yes, I was a NR, not living in US and not a student.
I still quite confused on how to fill out page 4 (tax on income not connected to US trade/business) of the 1040NR. I can't find any helpful information on how to fill out page 4 anyway. Can we look at an example?

1099:
Total Taxable Income:
- Non-Qualified Dividends $400
- Qualified Dividends $200
- Capital Gain Distributions $100
Total Non-Taxable and Tax Exempt Income:
- Non-Taxable Distributions $0
- Tax-Exempt Dividends and Interest $50
Total Realized Gain/Loss:
- Capital Net Short-Term Gain $2000
- Capital Net Long-Term Gain $1500

1040NR Page 4 (which ones do I use from above?):
- line 75a US Corporations: 400+200?
- line 75b Foreign Corporations: Nothing?
- line 83 Gains: 2000+1500+100?

Thank you!!
Shawn

AtlantaTaxExpert · May 8, 2006, 06:14 PM

Shawn:

You are asking us to prepare your return without compensation.

Read the instructions and read the answers.