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This caught my eye because I may have a similar problem. I own Bell Canadian Enterprises (BCE) in a traditional IRA. Bought the stock on the NYSE through Fidelity. I'll receive about $81US in dividends in 2005 and $162US in 2006. The full dividend is paid to me without withholding any Canadian tax. Fidelity shows it as foreign dividend income on their statement of IRA transactions. That's my only foreign income in either my IRA or taxable accounts. What are my tax obligations so far a filing Canadian tax return? With such a small amount can I just ignore it?

According to the BCE website, you are wrong. The website claims that US residents are subject to a 15% Canadian withholding tax on dividend payments as well as having the dividend qualify for reduced tax rates in the US. It's possible that Canadian tax law treats US IRA accounts different from US individual accounts, I don't know. But it looks to me as if you're paying foreign tax. If so, there is no way to recover it within the IRA. There is also no need to file a Canadian income tax return if your only Canadian-source income is dividends.

Ira
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