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Category: Tax
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Experience:  over 40 years experience in tax matters
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Regarding this same issue, I have an additional doubt, where

Customer Question

I'm a non-resident alien, I have mutual funds in US. I have no other income from US, so all my income is NOT effectively connected with the conduct of a U.S. trade or business.

I plan to fill out form 1040NR, and use the "Simplified Procedure for Claiming Certain Refunds" explained on page 4 of the instructions for form 1040NR.

I have a doubt, where (at schedule NEC) do I enter the amounts of column 2a (Total Capital Gains distributions) of my 1099-DIV forms? I think it may be at line 16G, but I don't have the information to complete fields 16b to 16e.

What do I do?
Submitted: 6 years ago.
Category: Tax
Expert:  CGCPA replied 6 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.

These entries get recorded on Schedule D of the form 1040. It is used as an attachment to the 1040NR for this purpose. From the Schedule D they transfer to the front page of the 1040NR.

I will get the specific line numbers for you and return.

Expert:  CGCPA replied 6 years ago.
The Schedule D items, when totaled get transferred to line 14 of the 1040NR.
Customer: replied 6 years ago.

Thanks for your reply.

As far as I know (from page 18 of pub 519) , I should not use "schedule D" since all of my income is not "Effectively connected with US trade/business".

Expert:  CGCPA replied 6 years ago.
Dividends, interest, and capital gain distributions are considered as effectively connected with US trade/business. That is why they are being reported on the 1099 by your broker.
Customer: replied 6 years ago.

Now Im confused, as I said on my original question, I was planning to use the "Simplified Procedure for Claiming Certains Refunds". I decided so after previous question, and maily for what is stated in page 18 of PUB 519:

Trading in stocks, securities, and commodities. If your only U.S. business activity is trading in stocks, securities, or commodities(including hedging transactions) through a U.S. resident broker or other agent, you are not engaged in a trade or business in the United States.

Then (assuming that mutual fund fall in that category), thats exactly my case.

Now, I did not received any 1042S form (I believe because I have had problems updating my W8BEN), only 1099-DIV.

So, for what I understand I only have to fill out schedule NEC, not schedule D, or do I have to fill out both?

Expert:  CGCPA replied 6 years ago.

This is a case concerning word use. While you, personally, are not effectively connected, the funds you have invested in are so connected. Also, you are not a broker so you are an investor. Investors are not effectively connected although their investments may be.


You need to complete Schedule D for capital gains and Schedule NEC for interest and dividends. Both will be required of you.