| Instructions for Form 1040 (Schedule A & B) |
2003 Tax Year |
Instructions for Schedule B, Interest and Ordinary Dividends
This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Use Schedule B (Form 1040) if any of the following apply.
- You had over $1,500 of taxable interest.
- Any of the Special Rules listed in the instructions for line 1 below apply to you.
- You are claiming the exclusion of interest from series EE or I U.S. savings bonds issued after 1989.
- You had over $1,500 of ordinary dividends.
- You received ordinary dividends as a nominee.
- You (a) had a foreign account or (b) received a distribution from, or were a grantor of, or transferor to, a foreign
trust. Part III of the schedule has questions about foreign accounts and trusts.
You may list more than one payer on each entry space for lines 1 and 5, but be sure to clearly show the amount paid next to
the payer's name. Add
the separate amounts paid by the payers listed on an entry space and enter the total in the “Amount” column. If you still need more space, attach
separate statements that are the same size as the printed schedule. Use the same format as lines 1 and 5, but show your totals
on Schedule B. Be sure
to put your name and social security number (SSN) on the statements and attach them at the end of your return.
Report on line 1 all of your taxable interest. Interest should be shown on your Forms 1099-INT, Forms 1099-OID, or substitute
statements. Include interest from series EE and I U.S. savings bonds. List each payer's name and show the amount.
Seller-Financed Mortgages
If you sold your home or other property and the buyer used the property as a personal residence, list first any interest the
buyer paid you on a
mortgage or other form of seller financing. Be sure to show the buyer's name, address, and SSN. You must also let the buyer
know your SSN. If you do
not show the buyer's name, address, and SSN, or let the buyer know your SSN, you may have to pay a $50 penalty.
If you received a Form 1099-INT that includes interest you received as a nominee (that is, in your name, but the interest actually
belongs to someone else), report the total on line 1. Do this even if you later distributed some or all of this income to
others. Under your last
entry on line 1, put a subtotal of all interest listed on line 1. Below this subtotal, enter “Nominee Distribution” and show the total interest
you received as a nominee. Subtract this amount from the subtotal and enter the result on line 2.
If you received interest as a nominee, you must give the actual owner a Form 1099-INT unless the owner is your spouse. You
must also file a
Form 1096 and a Form 1099-INT with the IRS. For more details, see the General Instructions for Forms 1099, 1098, 5498, and W-2G
and Instructions for Forms 1099-INT and 1099-OID.
When you buy bonds between interest payment dates and pay accrued interest to the seller, this interest is taxable to the
seller. If you received a
Form 1099 for interest as a purchaser of a bond with accrued interest, follow the rules earlier under Nominees to see how to report the
accrued interest on Schedule B. But identify the amount to be subtracted as “Accrued Interest.”
If you received a Form 1099-INT for tax-exempt interest, follow the rules earlier under Nominees to see how to report the
interest on Schedule B. But identify the amount to be subtracted as “Tax-Exempt Interest.”
Original Issue Discount (OID)
If you are reporting OID in an amount less than the amount shown on Form 1099-OID, follow the rules earlier under Nominees to
see how to report the OID on Schedule B. But identify the amount to be subtracted as “OID Adjustment.”
If you are reducing your interest income on a bond by the amount of amortizable bond premium, follow the rules earlier under
Nominees to
see how to report the interest on Schedule B. But identify the amount to be subtracted as “ABP Adjustment.”
Excludable Interest on Series EE and I U.S. Savings Bonds Issued After 1989
If, during 2003, you cashed series EE or I U.S. savings bonds issued after 1989 and you paid qualified higher education expenses
for yourself, your
spouse, or your dependents, you may be able to exclude part or all of the interest on those bonds. See Form 8815 for details.
Part II. Ordinary
Dividends
Note.
You may have to file Form 5471 if, in 2003, you were an officer or director of a foreign corporation. You may also have to file Form
5471 if, in 2003, you owned 10% or more of the total (a) value of a foreign corporation's stock or (b) combined voting power of
all classes of a foreign corporation's stock with voting rights. For details, see Form 5471 and its instructions.
Report on line 5 all of your ordinary dividends. This amount should be shown in box 1a of your Forms 1099-DIV or substitute
statements. List each payer's name and show the amount.
If you received a Form 1099-DIV that includes ordinary dividends you received as a nominee (that is, in your name, but the ordinary
dividends actually belong to someone else), report the total on line 5. Do this even if you later distributed some or all
of this income to others.
Under your last entry on line 5, put a subtotal of all ordinary dividends listed on line 5. Below this subtotal, enter “Nominee Distribution” and
show the total ordinary dividends you received as a nominee. Subtract this amount from the subtotal and enter the result on
line 6.
If you received dividends as a nominee, you must give the actual owner a Form 1099-DIV unless the owner is your spouse. You
must also file a
Form 1096 and a Form 1099-DIV with the IRS. For more details, see the General Instructions for Forms 1099, 1098, 5498, and W-2G
and Instructions for Form 1099-DIV.
Part III. Foreign
Accounts and Trusts
Check the “Yes” box on line 7a if either 1 or 2 next applies.
- You own more than 50% of the stock in any corporation that owns one or more foreign bank accounts.
- At any time during the year you had an interest in or signature or other authority over a financial account in a foreign country
(such as a
bank account, securities account, or other financial account).
Note.
Item 2 does not apply to foreign securities held in a U.S. securities account.
Exceptions.
Check the “ No” box if any of the following applies to you.
- The combined value of the accounts was $10,000 or less during the whole year.
- The accounts were with a U.S. military banking facility operated by a U.S. financial institution.
- You were an officer or employee of a commercial bank that is supervised by the Comptroller of the Currency, the Board of Governors
of the
Federal Reserve System, or the Federal Deposit Insurance Corporation; the account was in your employer's name; and you did not have a
personal financial interest in the account.
- You were an officer or employee of a domestic corporation with securities listed on national securities exchanges or with
assets of more
than $1 million and 500 or more shareholders of record; the account was in your employer's name; you did not have a personal
financial interest in the
account; and the corporation's chief financial officer has given you written notice that the corporation has filed a current report that
includes the account.
See Form TD F 90-22.1 to find out if you are considered to have an interest in or signature or other authority over a financial account
in a foreign country (such as a bank account, securities account, or other financial account). You can get Form TD F 90-22.1
by visiting the IRS
website at www.irs.gov/pub/irs-pdf/f9022-1.pdf.
If you checked the “ Yes” box on line 7a, file Form TD F 90-22.1 by June 30, 2004, with the Department of the Treasury at the
address shown on that form. Do not attach it to Form 1040.
If you checked the “Yes” box on line 7a, enter the name of the foreign country or countries in the space provided on line 7b. Attach a
separate statement if you need more space.
If you received a distribution from a foreign trust, you must provide additional information. For this purpose, a loan of
cash or marketable
securities generally is considered to be a distribution. See Form 3520 for details.
If you were the grantor of, or transferor to, a foreign trust that existed during 2003, you may have to file Form 3520.
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