U.S. legislation related to IRS code 1446(f) requires brokerage firms to withhold and submit tax from gross sales proceeds and certain distributions of publicly traded Partnerships (PTP) starting January 1, 2023.
Here are a few important things to note for Qtrade clients with PTPs in their portfolios:
- This applies to PTPs held by non-U.S. tax residents
- It does not apply to Put and Call Options of a PTP
- Exemption from withholding may apply if a PTP releases a public statement called a "Qualified Notice" to indicate it meets the requirements of IRC Sec. 1446(f)-4(b)(3)
- Withholding will be reported on the year-end Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding
For more information, please visit the IRS website: http://www.irs.gov/individuals/international-taxpayers/partnership-withholding