Dividends and distributions: If I own foreign securities in my IRA and there is a foreign tax withheld, may I claim a foreign tax credit?

Treatment of foreign tax withheld as a foreign tax credit or as a deduction depends upon the tax situation of each shareholder. IRS Publication 514, “Foreign Tax Credit for Individuals” and the instructions for Schedule A “Itemized Deductions” and Form 1116 “Foreign Tax Credit” provide more specific guidance. We also recommend that you consult IRS Publication 514, “Foreign Tax Credit for Individuals”, for additional information on this subject. Please consult your tax professional for any additional information and determination of the appropriate treatment for your tax situation…

If you own a mutual fund that invested in foreign securities, the mutual fund may have paid taxes to a foreign country as a result of owning those securities. Form 1099-DIV reports the gross amount of the dividend and the amount of foreign tax. Refer to…

No, contributions to a Roth IRA are not tax-deductible…

The TBSZ shelters the dividend income only when it originates from Hungary. Foreign dividends do not enjoy the tax protection of the TBSZ account because the foreign dividend payers may withhold foreign taxes from the payable amount. The Hungarian personal income tax will and social contribution tax (“szochó”)…