Foreign Tax Deductions

[johnreid]

Mark:

I have a number of stocks for which I must deal with a foreign tax. I note under the Dividend query that there is a menu section that deals with Foreign Tax. I have been unable to determine that when I enter a sum under that heading as to whether or not it deleates that amount from that account's cash Account? I assume it does, but does it?

John Reid

[Mark]

Hi John Reid,

If you record the foreign tax distribution as a negative value, then yes this will reduce your default cash account balance. You can verify by looking at the transactions in your default cash account.

[johnreid]

Mark,

This means that the Foreign Tax is set as a positive not a negative - it does not subtract the foreign tax. I think that in most cases when you have to pay a foreign tax, it is a negative; perhaps it could be set as such in the next version.

johnreid

[Mark]

Hi johnreid,

Yes, you would normally record a foreign tax paid as a negative distribution, so that it reduces your default cash account balance. It already works this way.

All distribution types work the same, in that when you receive money you record a positive distribution, and when you pay money you record a negative distribution.

[johnreid]

Mark,

I have the latest version of FM; however, when I enter a foreign tax in the Dividend Menu, it adds it to the total; it does not subtract. To get the Dividend Menu ->Foreign Tax to subtract that amount from the cash account, I have to enter it as a negative because the default is positive. I believe the default should be negative since when you pay the foreign tax, it is not going into your account but the government's!

johnreid

[Mark]

Hi johnreid,

This is the normal/intended operation. All distribution types work the same, in that when you receive money you record a positive distribution, and when you pay money you record a negative distribution. Since you are paying money in this case, you should be recording it as a negative value, and it will reduce your cash balance.