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Posted by sandybeth on February 16, 2008, 12:05 pm
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I own Templeton World Fund and on the end-of-year statement, I get a
list of all ordinary dividends, ST capital gains and LT capital
gains. However, on the 1099-DIV, it also lists "foreign tax paid."
The 1099-DIV adds together the ordinary dividents, ST capital gains,
and ALSO the foreign tax paid and this total is in the dividends box.
The LT capital gains are in a different box.
So when I try to figure out the tax basis (avg cost per share) when I
sell shares, which figures do I use? In the past, I have figured out
the cost--per-share by adding up the dividends, ST and LT cap gains
from the end-of-year statement, ignoring the foreign tax paid. I was
never audited on it, but I want to make sure I'm doing it right.
SandyBeth
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Posted by Harlan Lunsford on February 16, 2008, 5:10 pm
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sandybeth wrote:
> I own Templeton World Fund and on the end-of-year statement, I get a
> list of all ordinary dividends, ST capital gains and LT capital
> gains. However, on the 1099-DIV, it also lists "foreign tax paid."
> The 1099-DIV adds together the ordinary dividents, ST capital gains,
> and ALSO the foreign tax paid and this total is in the dividends box.
> The LT capital gains are in a different box.
> So when I try to figure out the tax basis (avg cost per share) when I
> sell shares, which figures do I use? In the past, I have figured out
> the cost--per-share by adding up the dividends, ST and LT cap gains
> from the end-of-year statement, ignoring the foreign tax paid. I was
> never audited on it, but I want to make sure I'm doing it right.
> SandyBeth
>
Foreign tax paid has nothing to do with your basis. It IS however a
deduction on that year's form 1040 on page 2. See form 1116 and use it
if you must, but you may not have to, rather enter foreign tax paid on
the appropriate line.
ChEAr$,
Harlan Lunsford, EA n LA
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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. >>
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Posted by scott s. on February 16, 2008, 11:30 pm
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> I own Templeton World Fund and on the end-of-year statement, I get a
> list of all ordinary dividends, ST capital gains and LT capital
> gains. However, on the 1099-DIV, it also lists "foreign tax paid."
> The 1099-DIV adds together the ordinary dividents, ST capital gains,
> and ALSO the foreign tax paid and this total is in the dividends box.
> The LT capital gains are in a different box.
> So when I try to figure out the tax basis (avg cost per share) when I
> sell shares, which figures do I use? In the past, I have figured out
> the cost--per-share by adding up the dividends, ST and LT cap gains
> from the end-of-year statement, ignoring the foreign tax paid. I was
> never audited on it, but I want to make sure I'm doing it right.
> SandyBeth
>
You are probably doing it wong. If you look at your statements, you
will probably see that the total cost of the shares purchased after
the fund paid out is the net after the foreign tax, not the gross
which is what you see on the 1099-Div. Until you sell it isn't an
issue though.
For me, Schwab seems very bad about not providing any info on the
gross divs nor foreign tax until the 1099 comes out in early Feb,
too late for the Jan 15 est tax payment date.
scott s.
.
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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. >>
<< ------------------------------------------------------- >>
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Posted by sandybeth on February 17, 2008, 5:03 pm
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> You are probably doing it wong. If you look at your statements, you
> will probably see that the total cost of the shares purchased after
> the fund paid out is the net after the foreign tax, not the gross
> which is what you see on the 1099-Div. Until you sell it isn't an
> issue though.
>
> For me, Schwab seems very bad about not providing any info on the
> gross divs nor foreign tax until the 1099 comes out in early Feb,
> too late for the Jan 15 est tax payment date.
>
> scott s.
> .
OK, Scott, so assume I am going to sell. Which figures do I use to
come up with the cost basis? The figures from the 1099-DIV or the
ones from the end-of-year statements with the foreign tax missing
(but, as you say, has already been deducted from the reinvested divs
and CapGns)? The Div figure on the 1099-DIV is higher because of
foreign tax added in, so it will make for a different cost basis. The
foreign tax is never listed on any of my Templeton quarterly
statements, only on that yearly 1099-DIV.
> --
> << ------------------------------------------------------- >>
> << 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 atwww.asktax.org. >>
> << Copyright (2007) - All rights reserved. >>
> << ------------------------------------------------------- >>
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
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Posted by Arthur Kamlet on February 17, 2008, 8:22 pm
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>OK, Scott, so assume I am going to sell. Which figures do I use to
>come up with the cost basis? The figures from the 1099-DIV or the
>ones from the end-of-year statements with the foreign tax missing
>(but, as you say, has already been deducted from the reinvested divs
The amount you reinvested to purchase new shares is
the cost for those shares. Your Fund's statements tell you
how much was reinvested. Use the statements.
The 1099 infomation is for tax reporting purposes only, and
even there, the fund is adding confusing information to the
1099. Specifically, short term gains of the fund has no
purpose on a tax reporting form, and IMO should never be
shown on a 1099.
Many funds today provide average cost information which
makes the tax reporting task much easier. If your fund
does not, you might consider another fund family.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
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