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claim treaty with 1040 example

发信人: tank (T-90), 信区: TAX
标  题: how to fill 8833 with 1040 -  an example
发信站: The unknown SPACE (Fri Mar 29 10:05:36 2002), 转信

I constantly receive mails from taxpayers regarding the
tax treaty claim for resident aliens. When I asked the IRS
questions, they also mailed me an example of 1040 and 8833
for the sixth year student.

--------------------------------------------------------
The case in the example is a sixth year student receive
$10000 from RA/TA and $6000 from scholarship.

Form 1040:
line 7: fill in your income in W2 form, 16000 in this case;
line 21: fill in -11000. Write "see attached form 8833"
         above the dotted line.
        
Form 8833:
Line 1 a: P.R.China;
        b: 20(b), 20(c), paragraph 2 of 04-30-1984 protocol
Line 2: IRC61; 871(b)
Line 3: N/A
line 4: N/A
Line 5: (This is a bit long)
        Taxpayer is a citizen of the People's Republic of China.
        He entered the USA on 08-15-1995 on an F-1 visa(student),
        and has remained in F-1 status continuously since then.       
        Under the residency rules of IRC 7701(b) the taxpayer
        passed the substantial presence test in 2000 and his
        residency starting date was Jan. 1, 2000. This means
        that for 2000, the taxpayer is a resident alien and is
        filling fomr 1040 for 2000 as a resident alien.
       
        Ariticle 20(c) of the USA-China income tax treaty allows
        an annual $5000 exclusion of student wages from gross
        income. The article contains no time limit, and a Chinese
        student who qualifies for it may use the article for
        as long as he is a bona fide student in valid F-1 status,
        including during that period in which he is engaged in
        practical training in valid F-1 status. Paragraph(2) of
        the 04-30-1984 protocol of the USA-China income tax
        treaty contains the "saving clause" of the treaty,
        which normally acts to nullify the tax teaty's benefits
        once a resident of China has become a resident of the USA.
        However, paragraph(2) of the Protocol also specifies
        exceptions to the saving clause, among which is article
        20 on student and trainees. This means that, even though
        the taxpayer has become a resident alien under the
        substantial presence test of IRC 7701(b), he may still
        claim the benefit of ariticle 20 of the USA-China income
        tax treaty. The taxpayer has elected to do this, and is
        claiming an exclusion from gross income for 2000 of
        $5000 in student wages as allowed by article 20(c) of
        the USA-China income tax treaty, and is claiming
        and exclusion from gross income of $6000 for his income
        from a scholarship as allowed by article 20(b) of the
        USA-China tax treaty.
       
        TOTAL EXCLUSION CLAIMED: $11,000
      
---------------------------------------------------------------

Note:
1. That the true original thing I received from IRS;
2. I don't totally understand it, such as line 2 of 8833;
3. Researchers/lectures with H1 visa can make some minor
   modification of this and fill your own form, givn article 19
   is also an exception of saving clauses.
4. I'm not a professional and take no responsibility of anything.
  
Good luck to all.

--
※ 来源:.The unknown SPACE bbs.mit.edu.[FROM: 209.222.207.25]

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