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Zip Taxes
Zip Taxes, Tax Preparer
Category: Tax
Satisfied Customers: 156
Experience:  CTEC Licensed / Mgmt Experience with H & R Block... Self Employed since 1986 Experienced in all Scheds
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Hi there, If I receive distributions from a corporation

Resolved Question:

Hi there,

If I receive distributions from a corporation in brazil (I am a brazilian citizen living in USA) and these distributions a taxed at the corporate level, but are not taxable in my personal income, do I have to pay taxes in the USA? In brazil they are called non'taxable dividends.
Submitted: 6 years ago.
Category: Tax
Customer: replied 6 years ago.
Relist: I still need help.
Expert:  Zip Taxes replied 6 years ago.
Welcome to Just Answers, I will do my best to Answer your Question.

Yes, if you receive the money in the US whether it is earned or unearned, you must pay taxes on that income. You should receive either a K-1 or a 1099 or a W-2 or some type of form from the corp. showing payment from them to you. If it is a dividend, then it will be a 1099 Int / Div. You should have a professional complete your taxes that would best protect you from loss and protect your rights.
Customer: replied 6 years ago.
May be I did not explain myself properly. The corporation in Brazil pays the taxes on the money earned. I am the sole shareholder of the corporation. When the money is distributed to me I don't pay taxes because is classified as non-taxable distribution, to avoid double taxation. I talked to another CPA and he informed me that since it was a non taxable distribution in my home country that it would be treated the same in the US. I don't get any Form of the type that you are talking about.

Please let me know if you have any international clients and if you have dealt with these situation before.
Expert:  Zip Taxes replied 6 years ago.
That is correct, now that I am clear about your question. It's true if you have paid taxes already on the money received, my question is, do you receive it in the US or is it distributed first in Brazil?

Sometimes, this income is still reported, but you show that the taxes already paid, so it's a credit on this end, but if you "do not" receive any form, it's difficult to track at best. So on that note, I will agree with the CPA that it will be treated the same. Keep a record and documentation as to the taxes paid in Brazil so no questions pop up a year or two down the road.
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Customer: replied 6 years ago.
Thank you,