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Date: Mon, 28 May 2012 10:51:49 EDT
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From: David Rosenbaum <davidrosenb...@gmail.com>
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On May 26, 9:39 pm, siemelna...@gmail.com wrote:
> On Friday, May 25, 2012 8:44:56 AM UTC-7, David Rosenbaum wrote:
> > Here's a bit of a weird question. When claiming a foreign tax credit
> > using Form 1116, income needs to be categorized.
>
> > Should unemployment compensation (foreign, obviously) be reported as
> > passive or as general limitation?
>
> I think it is general income because it's a division of wages/salaryhttp://www.irs.gov/instructions/i1116/ch01.html#d0e439.
>
> >From IRC 904
>
> BEGIN QUOTEhttp://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._904._L...
>
>         (B) Passive income
>           (i) In general
>             Except as otherwise provided in this subparagraph, the term
>           ''passive income'' means any income received or accrued by
>           any person which is of a kind which would be foreign personal
>           holding company income (as defined in section 954(c)).
>
>           (ii)
>
> END QUOTE
>
> There are also parts (ii) to (v) though I don't think they apply here.
>
> >From  IRC 954
>
> BEGIN QUOTEhttp://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._954._F...
>
>     (c) Foreign personal holding company income
>       (1) In general
>         For purposes of subsection (a)(1), the term ''foreign personal
>       holding company income'' means the portion of the gross income
>       which consists of:
>         (A) Dividends, etc.
>           Dividends, interest, royalties, rents, and annuities.
>         (B) Certain property transactions ...
>         (C) Commodities transactions ...
>         (D) Foreign currency gains ...
>         (E) Income equivalent to interest ...
>         (F) Income from notional principal contracts ...
>         (G) Payments in lieu of dividends ...
>         (I) Personal service contracts ...
>
> END QUOTE
>
> These statutes are very complicated and have lots of clauses that don't apply to most people, like (B) to (I) above, and one sections refers to another like how 904 refers to 954.  Seems Congress has too much time on its hands :).

Sounds good.

Thanks,

David

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