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Posted by Arthur Kamlet on May 2, 2008, 3:40 pm
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>On Apr 30, 8:33 pm, kam...@panix.com (Arthur Kamlet) wrote:
>The above paragraph is only true if these were foreign qualified
>dividends, right? If they were regular dividends, your regular US tax
>on them might have been more than 25%, in which case the AMT foreign
>tax credit and regular foreign tax credit would be the same.
If you hoild ADRs then it is highly likely your qualified dividends
and ordinary dividends are he same.
>Also, why is that that if your foreign tax is less than or equal to
>$300 (or $600 if married filing jointly), you don't have to file form
>1116. Say you're in the 15% bracket and own foreign stocks that pay
>dividends and foreign taxes, and the foreign taxes are 20% of the
>dividends, and the foreign tax is around $50. Your foreign tax credit
>should be limited to some value under 15% (or as your total tax rate
>will be less than 15% after deduction, exemption, and amount in 10%
>tax bracket). Yet you get the full tax credit.
The rules someimes allow for de minimis amounts to undergo
easier tax treatment and the law allows it here. So take
advantage of it.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
--
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