club_cafe: Investments receiving foreign taxes.

iras1 on

In a message dated 2/6/2006 1:16:34 A.M. Eastern Standard Time, blehnertz@bivio.com writes:

I sat down to do reports and tax forms in preparation for
our upcoming annual meeting. The first surprise with the
Form 8893, which we'd not had to file in the past.

You still don't have to file it. This appeared for the first time in 2004 when the IRS realized that many small partnerships were checking "yes" to question 4 on Schedule B, believing that doing so was making the election for consolidated audit treatment. The reality is that if your club has fewer than 10 members and wants to make this non-mandatory election, it must file Form 8893. If your club has more than 10 members, you are automatically subject to the consolidated audit procedure and don't have to answer this question. (Note: the bivio instructions are misleading in this regard.

But the real puzzler was the list of half of our portfolio
with a mandate to "Select the country for any investment
which received foreign taxes." I don't even know what that
means.

It means that somehow you have entered a foreign tax transaction for each of these stocks. You should review all of your transactions and correct as appropriate.

I think I found the 1065 Instructions that deal with it
(Foreign Transactions onn Pages 31-33. But even then, I
don't know where I would find what is being asked for. But
when I go to the Tax section on Bivio, there it is, I'm
presented with a list of 9 of the companies that we have
invested in during the year and I can't get past that screen
without picking a non-US country for each of them.
Interesting thing is that the two companies we own which are
domiciled outside the U.S. didn't make the list.

I strongly suspect that the problem lies within your club's data. My club has foreign stocks and had no problem completing the tax process.

Ira Smilovitz

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