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CGCPA
CGCPA, CPA
Category: Tax
Satisfied Customers: 3820
Experience:  over 40 years experience in tax matters
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I own stock in a Canadian company. It is held in a brokerage

Customer Question

I own stock in a Canadian company. It is held in a brokerage account. The broker sends me a 1099 that lists the income I receive from the Canadian company under Regular Dividends. When I go to the Canadian company's web site, they indicate that 55% of their distributions are "return of Capitol". How do I handle this on my US tax return
Submitted: 5 years ago.
Category: Tax
Expert:  CGCPA replied 5 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

 

You should be reporting the income as indicated on the 1099 unless you believe it is incorrect. If you believe the brokerage house has made an error you should contact them concerning this. A return of capital should be listed as a non taxable distribution on the 1099 and may already be there. If not ask the brokerage house why not. Other than that, as I began, you need to report your income as shown on the 1099 or you will raise all kinds of flags about your return at IRS.

Customer: replied 5 years ago.
Can I show the amount indicated on the 1099 (which includes the return of capital) and then subtract the amount that is a return of capital and attach a copy of the page from the company's web site that shows the percentage of their payment that is a return of capital. The brokerage house (Fidelity ) has refuced to correct the 1099 even though I sent them the information from the company's web site.
Expert:  CGCPA replied 5 years ago.
You can show the gross amount from the 1099 and later adjust this out. You need not attach the page from the Company's web site.

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