Department of the TreasuryInternal Revenue Service2018 Instructions for Schedule B(Form 1040) Interest andOrdinaryDividendsUse Schedule B (Form 1040) if any of the following applies. You had over $1,500 of taxable interest or ordinary dividends. You received interest from a seller-financed mortgage and the buyer used theproperty as a personal residence. You have accrued interest from a bond. You are reporting original issue discount (OID) of less than the amount shownon Form 1099-OID. You are reporting interest income of less than the amount shown on a Form 1099due to amortizable bond premium. You are claiming the exclusion of interest from series EE or I U.S. savings bondsissued after 1989. You received interest or ordinary dividends as a nominee. You had a financial interest in, or signature authority over, a financial account ina foreign country or you received a distribution from, or were a grantor of, or transferor to, a foreign trust. Section references are to the InternalRevenue Code unless otherwise noted.Future DevelopmentsFor the latest information about developments related to Schedule B (Form1040) and its instructions, such as legislation enacted after they were published,go to IRS.gov/ScheduleB.SpecificInstructionsYou can list more than one payer on each entry space for lines1 and 5, but be sure to clearlyshow the amount paid next to each payers name. Add the separate amountspaid by the payers listed on an entryspace and enter the total in theAmount column. If you still needmore space, attach separate statementsusing the same format as lines 1 and 5,but show your totals on Schedule B. Putyour name and social security number(SSN) on the statements and attach themat the end of your return.Part I. InterestLine 1. Report on line 1 all of your taxable interest. Taxable interest generallyshould be shown on your Forms1099-INT, Forms 1099-OID, or substiTIPtute statements. Include interest fromseries EE, H, HH, and I U.S. savingsbonds. Also include any accrued marketdiscount that is includible in income andany gain on a contingent payment debtinstrument that is includible in incomeas interest income. List each payersname and the amount. Dont report online 1 any tax-exempt interest. SeeTax-exempt interest, later, for more information.For more information on stated interest, original issue discount (OID), market discount, contingent payment debtinstruments, and premium, see Pub. 550and Pub. 1212.Seller-financed mortgages. If yousold your home or other property andthe buyer used the property as a personalresidence, list first any interest the buyerpaid you on a mortgage or other form ofseller financing. Be sure to show thebuyers name, address, and SSN. Youalso must let the buyer know your SSN.If you dont show the buyers name, address, and SSN, or let the buyer knowyour SSN, you may have to pay a $50penalty.Nominees. If you received a Form1099-INT that includes interest you received as a nominee (that is, in yourname, but the interest actually belongsto someone else), report the total online 1. Do this even if you later distributed some or all of this income to others.Under your last entry on line 1, put asubtotal of all interest listed on line 1.Below this subtotal, enter NomineeDistribution and show the total interestyou received as a nominee. Subtract thisamount from the subtotal and enter theresult on line 2.If you received interest as anominee, you must give the actual owner a Form 1099-INT(unless the owner is your spouse) andfile Forms 1096 and 1099-INT with theIRS. For more details, see the GeneralInstructions for Certain Information Returns and the Instructions for Forms1099-INT and 1099-OID.Accrued interest. When you buybonds between interest payment datesand pay accrued interest to the seller,this interest is taxable to the seller. Ifyou received a Form 1099 for interest asa purchaser of a bond with accrued interest, follow the rules earlier underNominees to see how to report the accrued interest. But identify the amountto be subtracted as Accrued Interest.Original issue discount (OID). Ifyou are reporting OID in an amount lessthan the amount shown in box 1 orbox 8 of Form 1099-OID, follow therules earlier under Nominees to see howto report the OID. But identify theTIPB-1Oct 22, 2018 Cat. No. 70541Yamount to be subtracted as OID Adjustment. However, if the payer reported toyou a net amount of OID on the bond reflecting the offset of the gross amount ofOID by any acquisition premium, no reduction of the amount of OID incomereported to you by the payer may beneeded on Schedule B for the bond.Amortizable bond premium. If youelect to reduce your interest income on ataxable bond by the amount of taxableamortizable bond premium, follow therules earlier under Nominees to see howto report the interest. But identify theamount to be subtracted as ABP Adjustment. However, if the payer reported to you a net amount of interest income on the bond reflecting the offset ofthe gross amount of interest income bythe amortizable bond premium, no reduction of the amount of interest incomereported to you by the payer is neededon Schedule B for the bond.Tax-exempt interest. If you receivedany tax-exempt interest (including anytax-exempt OID), such as from municipal bonds, each payer should send you aForm 1099-INT or a Form 1099-OID. Ingeneral, your tax-exempt stated interestshould be shown in box 8 of Form1099-INT or, for a tax-exempt OIDbond, in box 2 of Form 1099-OID, andyour tax-exempt OID should be shownin box 11 of Form 1099-OID. Enter thetotal on line 2a of your Form 1040.However, if you acquired a tax-exemptbond at a premium, only report the netamount of tax-exempt interest on line 2aof your Form 1040 (that is, the excess ofthe tax-exempt interest received duringthe year over the amortized bond premium for the year). Also, if you acquired atax-exempt OID bond at an acquisitionpremium, only report the net amount oftax-exempt OID on line 2a of your Form1040 (that is, the excess of the tax-exempt OID for the year over the amortized acquisition premium for the year).See Pub. 550 for more informationabout OID, bond premium, and acquisition premium.Also include on line 2a of your Form1040, any exempt-interest dividendsfrom a mutual fund or other regulatedinvestment company. This amountshould be shown in box 11 of Form1099-DIV.If an amount is shown in box 9 ofForm 1099-INT, you generally must report it on line 2g of Form 6251. See theInstructions for Form 6251 at IRS.gov/Form6251 for details.Line 3. If, during 2018, you cashed series EE or I U.S. savings bonds issued after 1989 and you paid qualified highereducation expenses for yourself, yourspouse, or your dependents, you may beable to exclude part or all of the intereston those bonds. See Form 8815 atIRS.gov/Form8815 for details.Part II. Ordinary DividendsYou may have to file Form5471 if, in 2018, you were anofficer or director of a foreigncorporation. You also may have to fileForm 5471 if, in 2018, you owned 10%or more of the total (a) value of a foreign corporations stock, or (b) combined voting power of all classes of aforeign corporations stock with votingrights. For details, see Form 5471 andits instructions at IRS.gov/Form5471.Line 5. Report on line 5 all of your ordinary dividends. This amount should beshown in box 1a of your Forms1099-DIV or substitute statements.Nominees. If you received a Form1099-DIV that includes ordinary dividends you received as a nominee (thatis, in your name, but the ordinary dividends actually belong to someone else),report the total on line 5. Do this even ifyou later distributed some or all of thisincome to others. Under your last entryon line 5, put a subtotal of all ordinarydividends listed on line 5. Below thissubtotal, enter Nominee Distributionand show the total ordinary dividendsyou received as a nominee. Subtract thisamount from the subtotal and enter theresult on line 6.If you received dividends as anominee, you must give the actual owner a Form 1099-DIV(unless the owner is your spouse) andfile Forms 1096 and 1099-DIV with theIRS. For more details, see the GeneralInstructions for Certain Information Returns and the Instructions for Form1099-DIV.TIPTIPPart III. Foreign Accountsand TrustsRegardless of whether you arerequired to file FinCEN Form114 (FBAR), you may be required to file Form 8938, Statement ofSpecified Foreign Financial Assets, withyour income tax return. Failure to fileForm 8938 may result in penalties andextension of the statute of limitations.See IRS.gov/Form8938 for more information.Line 7aQuestion 1. Check the Yesbox if at any time during 2018 you had afinancial interest in or signature authority over a financial account located in aforeign country. See the definitions thatfollow. Check the Yes box even if youarent required to file FinCEN Form 114.Financial account. A financial account includes, but isnt limited to, a securities, brokerage, savings, demand,checking, deposit, time deposit, or otheraccount maintained with a financial institution (or other person performing theservices of a financial institution). A financial account also includes a commodity futures or options account, an insurance policy with a cash value (suchas a whole life insurance policy), an annuity policy with a cash value, andshares in a mutual fund or similarpooled fund (that is, a fund that is available to the general public with a regularnet asset value determination and regular redemptions).Financial account located in a foreign country. A financial account is located in a foreign country if the accountis physically located outside of the United States. For example, an accountmaintained with a branch of a UnitedStates bank that is physically locatedoutside of the United States is a foreignfinancial account. An account maintained with a branch of a foreign bankthat is physically located in the UnitedStates isnt a foreign financial account.Signature authority. Signature authority is the authority of an individual(alone or in conjunction with another individual) to control the disposition of assets held in a foreign financial accountby direct communication (whether inwriting or otherwise) to the bank or other financial institution that maintains theTIPB-2financial account. See the FinCEN Form114 instructions for exceptions. Dontconsider the exceptions relating to signature authority in answering Question 1on line 7a.Other definitions. For definitions offinancial interest, United States, andother relevant terms, see the instructionsfor FinCEN Form 114.Line 7aQuestion 2. See FinCENForm 114 and its instructions atwww.fincen.gov to determine whetheryou must file the form. Check the Yesbox if you are required to file the form.Check the No box if you arent required to file the form.If you checked the Yes box toQuestion 2 on line 7a, you must electronically file FinCEN Form 114 withTreasurys Financial Crimes Enforcement Network. A U.S. person that has afinancial interest in or signature authority over foreign financial accounts mustfile the form if the aggregate value offoreign financial accounts exceeds$10,000 at any time during 2018. Donot attach FinCEN Form 114 to your taxreturn.For the due date and more information about FinCEN Form 114, seewww.fincen.gov.If you are required to file FinCEN Form 114 but dont properly do so, you may have to paya civil penalty up to $10,000. A personwho willfully fails to report an accountor provide account identifying information may be subject to a civil penaltyequal to the greater of $100,000 or 50%of the balance in the account at the timeof the violation. Willful violations alsomay be subject to criminal penalties.Line 7b. If you are required to file FinCEN Form 114, enter the name of theforeign country or countries in the spaceCAUTION!provided on line 7b. Attach a separatestatement if you need more space.Line 8. If you received a distributionfrom a foreign trust, you must provideadditional information. For this purpose,a loan of cash or marketable securitiesgenerally is considered to be a distribution. See the Instructions for Form 3520at IRS.gov/Form3520 for details.If you were the grantor of, or transferor to, a foreign trust that existed during 2018, you may have to file Form3520.Dont attach Form 3520 to Form1040. Instead, file it at the addressshown in its instructions.If you were treated as the owner of aforeign trust under the grantor trustrules, you also are responsible for ensuring that the foreign trust files Form3520-A. Form 3520-A is due on March15, 2019, for a calendar year trust. Seethe Instructions for Form 3520-A atIRS.gov/Form3520A for details.B-3
2018 Instructions for Schedule B
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