foreign dividends: a stinky, poopy discovery

Crash

My brokerage is TRP. I don't suppose it makes any difference, though.
Im in a no tax due bracket every year on the 1040.

I own Norsk Hydro via the ADR: NHYDY. Here comes a dividend. Great! A few days later: here comes notice that foreign tax was withheld at the source. AND a fee, originating at the source. I hope there's a way on the lovely tax form to recoup that foreign tax paid.

TRP offers no-fee transactions if you do it all yourself, online. But, wait: you'll still take it in the shorts some way or another. When I first began to buy single stocks, I tracked a Canadian energy outfit, beforehand: Parkland. When I wanted to buy shares, there was a FEE. At least it was noted before purchase. Our yogibearbull alerted me as to why: the security could be bought in the States only with an "F" suffix. A "Y" suffix would involve NO FEE. Which is why I bought NHYDY.

.......Pig farts! I love being ambushed, don't you all, too?
(It's not your fault, @yogibearbull. You were just looking out for me. Thanks.)

johnN

Good list recession divs
$PFE Pfizer
$COST Costco
$WBA Walgreens
$CVS CVS Health
$DG Dollar General
$NEE NextEra Energy
$PG Procter & Gamble
$LMT Lockheed Martin
$WM Waste Management
$UNH UnitedHealth Group
$AWK American Water Works

Or add vanguard div etf $VYM
Or VNQ

Crash

.....But with the news-talk of a boycott of Russian aluminum, NHYDY shot up today,
on Friday before the week-end, by +8.87% in a single day. You can bet the shorts will play with that one, when Monday comes. (And I ask: why didn't you do that already, Joe???????).
https://www.cnbc.com/2022/10/13/biden-administration-may-block-russian-aluminum-imports.html

*Edit: oops, today's Thurs, not Friday. I've been a bit "under the weather."

Crash

johnN said:

Good list recession divs
$PFE Pfizer
$COST Costco
$WBA Walgreens
$CVS CVS Health
$DG Dollar General
$NEE NextEra Energy
$PG Procter & Gamble
$LMT Lockheed Martin
$WM Waste Management
$UNH UnitedHealth Group
$AWK American Water Works

Or add vanguard div etf $VYM
Or VNQ

*******************************************
No Vanguard for me. Just read the reports here at MFO of stinky customer service.
I've got my lineup pretty well figured out, by now. Looking to add just one of the big Canadian banks. CM looks most likely.

Crash

"...Hydro Havrand is Norsk Hydro ASA's green hydrogen company."
https://www.marketwatch.com/story/h2-green-steel-hydro-havrand-explore-developing-green-hydrogen-production-facilities-271665645632?mod=mw_quote_news

Derf

@Crash : Do the Canadian banks have a foreign tax applied to their dividends ?

Crash

Derf said:

@Crash : Do the Canadian banks have a foreign tax applied to their dividends ?

I was up there on one of my many trips, many years ago. I remember the conversation with the banker-person that day. it was at a BMO branch. She explained that if I were to open a brokerage account there, but I live in the States, they would withhold tax. But of course, depending upon what's on your own 1040, it may be refunded to you. You DO have a line-item on the 1040 where you can claim credit for "Foreign Tax Paid." ..... Living in the States and holding a brokerage account here, and buying canadian bank stocks via a stateside brokerage is a bit different thing. But I'd bet dollars to donuts you'd have some foreign tax withheld. Wish I could tell you for certain.

Derf

Thanks @Crash

Crash

Derf said:

Thanks @Crash

Google:

"More specifically, the Canadian tax authority, which is called the Canada Revenue Agency, generally withholds 30% of all dividends paid to out-of-country investors. Fortunately, this 30% is reduced to 15% thanks to a tax treaty shared by Canada and the United States."

Mark

Tax Implications For U.S. Investors Owning Canadian Stocks

Crash

@Mark. Grateful for that. @Derf

"...Canada has its own form that can be submitted to request a refund of withholding tax..."
Hmmmmm. Your question was timely, Derf. Now, I must decide whether the rock-solid reliability of Canadian banks is worth that cost. I have no doubt that my tax guy knows what to do in order to retrieve any Canadian tax refund I might be due.

yogibearbull

The IRS just denied my deduction for foreign taxes that were shown in my brokerage 1099s; I didn't file From 1116. IRS said that those foreign tax credits were just offset by my AMT obligations. I am really far from AMT but did have high tax-exempt interest from private-activity bonds (a change from previous years).

Does anyone know more about this issue? There are AMT-free muni funds too and I can switch to those. Is that the issue, or something else? The amount denied isn't large enough to hire a lawyer.

BTW, as I had paid my taxes due via IRS Direct Pay, so this IRS letter was the only indication for me that my 2021 tax return (paper filing!) was finally processed.

BTW2, I was able to login to my IRS Direct Pay with my old credentials and the new IDme is just optional. I knew its implementation was delayed/suspended but I now got verification.

Sven

No, never had issue on foreign tax credit. My foreign tax credit is quite small.

What will you do differently in your 2022 tax filing in order to avoid this foreign tax credit issue? I have been filing electronically for many years and have no issue.

Crash

(I suppose I will do nothing at all differently, given my personal tax status. I just hate the ambush: No fees clearly advertised, then... oops!)