2001 Instructions for Form 1040NR - Uncle Fed's Tax*Board

The following list gives only a on the dotted line on line 79 (or attach a date of arrival shown on your most
general idea of the type of income to separate schedule if more space is recent INS Form I-94, Arrival-Departure
include on page 4. (For more needed). If they have net gambling Record.
information, see Pub. 519.) Include the winnings (after offsetting their total Exception: If you are claiming a tax
following only to the extent the amount gambling losses against their total treaty benefit that is determined by
received is not effectively connected gambling winnings), they should include reference to more than one date of
with the conduct of a trade or business this net amount on line 79, column (d). arrival, enter the earlier date of arrival.
in the United States.
For example, you are currently claiming
1. Income that is fixed or periodic,
Social Security Benefits (and Tier 1
treaty benefits (as a teacher or a
such as interest (other than original
Railroad Retirement Benefits Treated
researcher) under article 19 of the tax
issue discount), dividends, rents,
as Social Security). 85% of the U.S.
treaty between the United States and
salaries, wages, premiums, annuities,
social security and equivalent railroad
Japan. You previously claimed treaty
other compensation, or alimony
retirement benefits you received are
benefits (as a student) under article 20
received. Other items of income, such
taxable. This amount is treated as U.S.
of that treaty. Under article 22 of that
as royalties, also may be subject to the
source income not effectively
treaty, the combination of consecutive
30% tax.
connected with a U.S. trade or
exemptions under articles 19 and 20
business. It is subject to the 30% tax
Interest from a U.S. bank, savings
may not extend beyond 5 tax years
rate, unless exempt or taxed at a
and loan association, or similar
from the date you entered the United
reduced rate under a U.S. tax treaty.
institution, and from certain deposits
States as a student. If article 22 of that
Social security benefits include any
with U.S. insurance companies is tax
treaty applies, enter in item E the date
monthly benefit under title II of the
exempt to nonresident aliens if it is not you entered the United States as a
Social Security Act or the part of a tier 1
effectively connected with a U.S. trade
student.
railroad retirement benefit treated as a
or business. For more information, see social security benefit. They do not Item M
Pub. 519.
include any Supplemental Security
If you are a resident of a treaty country,
Note: Portfolio interest that you Income (SSI) payments.
you must know the terms of the tax
received as a nonresident alien on You should receive a Form
treaty between the United States and
obligations issued after July 18, 1984, SSA-1042S showing the total social the treaty country to properly complete
is exempt from the 30% tax. For more security benefits paid to you in 2001 item M. You may download the
information, see Pub. 519.
and the amount of any benefits you complete text of most U.S. tax treaties
2. Gains, other than capital gains, repaid in 2001. If you received railroad at www.irs.gov/prod/ind_info/
from the sale or exchange of patents, retirement benefits treated as social treaties.html. Technical explanations for
copyrights, and other intangible
security, you should receive a Form many of those treaties are also
property.
RRB-1042S.
available at that site. Also, see Pub.
3. Original issue discount (OID). If
Enter 85% of the total amount from
901 for a quick reference guide to the
you sold or exchanged the obligation,
box 5 of all your Forms SSA-1042S
provisions of U.S. tax treaties.
include in income the OID that accrued
and Forms RRB-1042S in the
If you are claiming treaty benefits on
while you held the obligation minus the
appropriate column of line 77 of Form Form 1040NR, you must provide all of
amount previously included in income.
1040NR. Enter any Federal tax
the information requested in item M.
If you received a payment on an OID
withheld in column (a) of line 77. Attach If you are claiming treaty
obligation, see Pub. 519.
a copy of each Form SSA-1042S and
benefits and you failed to submit
4. Capital gains in excess of capital
!
RRB-1042S to Form 1040NR.
CAUTION adequate documentation to a
losses from U.S. sources during 2001.
Withholding of Tax at the Source. A withholding agent, you must attach all
Include these gains only if you were in
tax must be withheld at the source on information that would have otherwise
the United States at least 183 days
certain income from U.S. sources paid been required on the withholding
during 2001. They are not subject to
to nonresident aliens. The withholding document (for example, all information
U.S. tax if you were in the United
is generally at the 30% rate. There are required on Form W-8BEN or Form
States less than 183 days during the
exceptions to the general rule, and tax 8233).
tax year. In determining your net gain,
do not use the capital loss carryover. treaties with various countries may Reporting of Treaty Benefits
provide a lower rate or exempt certain
Losses from sales or exchanges of
Claimed
income from withholding. The tax must
capital assets in excess of similar gains
be withheld by the person who pays If you take the position that a treaty of
are not allowed.
fixed or determinable annual or periodic the United States overrides or modifies
If you had a gain or loss on
income to nonresident aliens. The any provision of the Internal Revenue
disposing of a U.S. real property income subject to this withholding Code and that position reduces (or
interest, see Dispositions of U.S. Real should be reported on page 4 of Form potentially reduces) your tax, you must
Property Interests on page 5. 1040NR. For details, see Pub. 519, report certain information on Form
5. Prizes, awards, and certain Pub. 515, and section 1441 and its 8833 and attach it to Form 1040NR.
gambling winnings. Proceeds from regulations.
You can be charged a $1,000
lotteries, raffles, etc., are gambling
penalty for each failure to report the
winnings (see section 871(j) for
required information. For more details,
exceptions). You must report the full
see Form 8833 and Regulations section
amount of your winnings. You cannot
Other Information
301.6114-1.
offset losses against winnings and (Page 5) Exceptions. You do not have to file
report the difference.
Form 8833 for any of the following
Item E
situations.
Note: Residents of Canada may claim
gambling losses, but only to the extent You are generally required to enter 1. You claim a reduced rate of
of gambling winnings. They should your date of entry into the United States withholding tax under a treaty on
report both their total gambling that pertains to your current interest, dividends, rents, royalties, or
winnings and their total gambling losses nonimmigrant status. For example, the other fixed or determinable annual or
-24- Instructions for Form 1040NR