Question

I received a NR4 form from an inheritance I received from my Aunt in Canada. How do I enter that on my U.S. Taxes. The Code is 11 on it.

Forum|Forum|2 years ago
January 26, 2024
1 reply
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My cousin said her accountant used a 1099INT form for it.

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The NR4 can be reporting different kinds of income. It needs to be entered on the US version. Code 11 is rust income. Trust income is reported on a k-1. Be sure to convert to US dollars. See Yearly Average Currency Exchange Rates | Internal Revenue Service.

You may not have the information to fill out a k-1 correctly. If not, then other entries are optional. I would be tempted to use misc. income where you enter a description, NR4 code 11 income. This is second choice after proper k-1 entry:

To enter the NR4:

You would go to personal income,
scroll to the bottom to misc income,
start,
scroll to the bottom again,
other reportable income,
start.
enter description - NR4 code 11 trust income
enter US $ amount

See Appendix B. for codes.

Your cousin reported on 1099-INT which is for interest earned.

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M

megchavAuthor

Thank you. My cousin said her accountant used a 1099INT but that didn't seem like the correct form to use. I know that I paid taxes on the inheritance because that's included in one of the boxes. Non resident tax withheld and it also has a gross income but two different numbers 17 and 26. (Those must be the box numbers I'm assuming) It has one for the USA and one for Canada but two different boxes.

It's so confusing.

DaveF1006

I am not certain why there are two different amounts reported. i would assume that the US rate reported is a conversion rate to US dollars but you may need to check with the Trustee to see if this is the case. Boxes 17-27 are taxes that you paid while being a non-resident of Canada.

You may claim a Foreign Tax Credit for the taxes withheld in Canada in USD by going to:

Federal>deductions and credits>deductions and credits>estimate and other taxes paid>Foreign Tax Credit>start or revisit
When it asks We just need to check if you have any uncommon situations indicate I paid foreign taxes on income I earned while working in another country. Even though technically you didn't, you will to indicate this so the program can move forward.
Navigate and record the entries that the program asks for and when you reach the page that mentions Foreign Tax Credit Worksheet, this is where you take notice.
The first that you will be asked is what category of income is it, you will say passive income.
Next screen will say Country Summary, select add a country and then select Canada.
When it says Other Gross Income - Canada, don't put anything here since you already reported it using the steps Amy C recommended.
then you will navigate through the screens until you come to a screen that says Foreign Taxes Paid - Canada, here is where you record the amount paid under Foreign Taxes on Other Income. Then below that you will enter the amount of taxes paid in taxes.