Foreign Tax

L1: Foreign TaxI”m not sure this is a question that can be answered by this forum, but here it is.Can I take a foreign tax credit for Foreign Tax paid from a SEPP IRA? ThanksJoe Rovero2006-12-15 12:15, By: Joe, IP: [67.169.13.239]
L2: Foreign TaxHello Joe:
Unfortunately, the answer is no; not because you are taking SEPPs from an IRA; but rather; the only time you can take a deduction or credit on your tax return is when you pay that amount. In this case, you did not pay it; your IRA (which is technically a different tax entity) paid. Further, there is no provision for you to reimburse your IRA for these foreign taxes. Sorry.
TheBadger
wjstecker@wispertel.net
2006-12-16 06:38, By: TheBadger, IP: [72.42.67.24]

L2: Foreign TaxNo tax credit, but there have been several cases of foreign taxes being withheld at the source in violation of tax treaties with the US that exempts IRA accounts from witholding. Canada is one of these jurisdictions, and the taxpayer can file a form to directly request a refund of the tax from Canada. That said, any refund issued should be made out to the IRA, and that would create a rollover to a SEPP account that would likely generate a long dissertation with the IRS trying to prove the funds originally emanted from the same account.
So it”s probably not worth the trouble unless there are major dollars involved. Most experts also agree that normal losses to foreign taxes are not sufficient enough to recommend that more of the foreign allocation be made to taxable accounts where the credit can be claimed on Form 1040 or 1116.
2006-12-17 12:04, By: Alan S., IP: [24.116.66.98]