Publication 54 - Tax Guide For U.s. Citizens And Resident Aliens Abord - 2011 Page 42
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442) Can Internal Revenue Service
Note. Foreign income taxes are
Yes. Form 673 is a sample state-
Yes. The loss should be reported
personnel recommend tax prac-
ment that can be used by individu-
usually claimed under the credit
as a short-term capital loss on
titioners who prepare returns?
als who expect to qualify for the
provisions, if they apply, because
Schedule D (Form 1040). You have
the burden of proving the validity of
foreign earned income exclusion
this is more advantageous in most
No. IRS employees are not permit-
the loan, the subsequent bank-
under the bona fide residence test
cases.
ted to recommend tax practitioners
or the physical presence test. A
ruptcy, and the recovery or
who prepare income tax returns.
4) I rented an apartment in the
nonrecovery from the loan.
copy of this form is displayed in
United Kingdom and had to pay
chapter 2.
3) I just filed my return. How do I
a local tax called a “general
8) With which countries does the
check the status of my refund?
rates” tax, which is based on oc-
United States have tax treaties?
3) I am a U.S. citizen residing
cupancy of the apartment. Can I
overseas, and I receive dividend
See Refund Information in your tax
deduct this tax as a foreign real
and interest income from U.S.
Table 6-1, at the end of chapter 6,
return instructions.
estate tax?
sources from which tax is being
lists those countries with which the
withheld at a rate of 30%. How
United States has income tax trea-
4) I have not received my refund
can I have this situation cor-
No. This tax does not qualify as a
ties.
from last year’s return. Can I
rected?
real estate tax since it is levied on
claim the credit against this
the occupant of the premises rather
9) I am a retired U.S. citizen living
year’s tax?
in Europe. My only income is
File Form W-9 (indicating that you
than on the owner of the property.
from U.S. sources on which I pay
are a U.S. citizen) with the with-
No. That would cause problems to
Scholarship and
U.S. taxes. I am taxed on the
holding agents who are paying you
both years’ returns. If your last
same income in the foreign
Fellowship Grantees
the dividends and interest. This is
year’s refund is overdue, contact
country where I reside. How do I
their authority to stop withholding
the IRS and ask about the status of
avoid double taxation?
the 30% income tax at the source
1) I am a Fulbright grantee. What
the refund. If you are outside the
on payments due you.
documentation must I attach to
United States, call or write the
If you reside in a country that has
my return?
nearest IRS office. Otherwise, call
an income tax treaty with the
4) As a U.S. citizen receiving div-
or write your local U.S. IRS office. If
United States, the treaty will gener-
idend and interest income from
a) There are no special tax
you write to the IRS, be sure to
the United States from which tax
ally contain provisions to eliminate
forms for Fulbright grantees. File
include your social security number
has been withheld, do I report
double taxation. Many treaties will
on a regular Form 1040.
(or individual taxpayer identifica-
the net dividend and interest in-
provide reduced rates for various
b) If you claim exemption as a
tion number) in the letter.
come on my return, or do I report
types of income. Treaties often pro-
scholarship or fellowship grantee,
the gross amount and take credit
vide reciprocal credits in one coun-
submit brochures and correspond-
5) I forgot to include interest in-
for the tax withheld?
try for the tax paid to the other
ence describing the grant and your
come when I filed my return last
country. Nontreaty countries, de-
week. What should I do?
duties.
You must report the gross amount
pending on their laws, may give the
c) If you are located in a foreign
of the income received and take a
same type of credit.
To correct a mistake of this sort,
country and wish to pay tax in for-
tax credit for the tax withheld. This
If double taxation with a treaty
you should prepare Form 1040X.
eign currency, you should submit a
is to your advantage since the tax
country exists and you cannot re-
Include the omitted interest in-
certified statement showing that
withheld is deducted in full from the
solve the problem with the tax au-
come, refigure the tax, and send
you were a Fulbright grantee and at
tax due. It is also advisable to at-
thorities of the foreign country, you
the form as soon as possible along
least 70% of the grant was paid in
tach a statement to your return ex-
can contact the U.S. competent au-
with any additional tax due to the
nonconvertible foreign currency.
plaining this tax credit so there will
thority for assistance. See chapter
Internal Revenue Service Center
be no question as to the amount of
6 for information on requesting
where you filed your return. Use
2) I taught and lectured abroad
credit allowable.
consideration.
Form 1040X to correct an individ-
under taxable grants. What ex-
penses can I deduct?
ual Form 1040 income tax return
Deductions
10) My total income after claim-
filed for any year for which the pe-
ing the foreign earned income
riod of limitation has not expired
You may be able to deduct your
1) Can I claim a foreign tax credit
and housing exclusions con-
(usually 3 years after the due date
travel, meals, and lodging ex-
even though I do not itemize de-
sists of $5,000 taxable wages.
of the return filed, or 2 years after
penses if you are temporarily ab-
Am I entitled to claim the earned
ductions?
the tax was paid, whichever is
sent from your regular place of
income credit?
later).
employment. For more information
Yes. You can claim the foreign tax
about deducting travel, meals, and
No. If you claim the foreign earned
credit even though you do not item-
6) I am a U.S. citizen and, be-
lodging expenses, get Publication
income exclusion, the foreign
ize deductions.
cause I expect to qualify for the
463, Travel, Entertainment, Gift,
housing exclusion, or the foreign
foreign earned income exclu-
and Car Expenses.
2) I had to pay customs duty on a
housing deduction, you cannot
sion, all my foreign income
few things I brought back with
claim the earned income credit.
(which consists solely of salary)
General Tax Questions
me from Europe last summer.
will be exempt from U.S. tax. Do I
Can I include customs fees with
11) Last May my employer trans-
get any tax benefit from income
my other deductible taxes?
ferred me to our office in Puerto
1) Will the Internal Revenue
tax I paid on this salary to a for-
Rico. I understand that my salary
Service representatives at the
eign country during the tax
earned in Puerto Rico is tax ex-
No. Customs duties, like federal
Embassies answer questions
year?
empt. Is this correct?
excise taxes, are not deductible.
about tax laws of our home state
and the laws of the foreign coun-
No. You cannot take either a tax
3) What types of foreign taxes
try where we reside as well as
As long as your employer is not the
credit or a tax deduction for foreign
are deductible?
U.S. federal income tax laws?
U.S. Government, all income from
income taxes paid on income that
sources within Puerto Rico is ex-
is exempt from U.S. tax because of
Generally, real estate and foreign
No. The IRS representatives are
empt from U.S. tax if you are a
the foreign earned income exclu-
income taxes are deductible as
authorized only to answer tax
bona fide resident of Puerto Rico
sion.
itemized deductions. Foreign in-
questions on U.S. federal income
during the entire tax year. The in-
come taxes are deductible only if
tax. You should write your home
come you received from Puerto Ri-
7) I am a U.S. citizen stationed
you do not claim the foreign tax
state’s tax office for state tax infor-
can sources the year you moved to
abroad. I made a personal loan
credit. Foreign income taxes paid
mation and contact the tax officials
Puerto Rico is not exempt. The tax
to a nonresident alien who later
on excluded income are not de-
of the country where you reside for
paid to Puerto Rico in the year you
went bankrupt. Can I claim a bad
debt loss for this money?
moved to Puerto Rico can be
ductible as an itemized deduction.
information regarding their taxes.
Page 42
Publication 54 (2011)
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