Looking for resources on taxation of foreign ordinary and ADR stocks for US citizens?

I've been investing internationally for about a decade now, so I can help point you in the right direction! Foreign investments are definitely more complex for US taxpayers, but they're manageable once you understand the basics. For ordinary shares vs ADRs, there are some key differences in taxation. ADRs are easier because the custodian bank typically handles the foreign tax withholding, while with direct foreign shares, you'll deal with the foreign tax authorities' rules directly. The IRS Publication 514 "Foreign Tax Credit for Individuals" is actually quite good for understanding how to claim credit for foreign taxes paid. For most retail investors, you'll qualify for the simplified procedure if your foreign tax payments are under $300 ($600 if married filing jointly). Look into the specific tax treaties between the US and the countries you're investing in - they usually determine withholding rates. The IRS has a page listing all current tax treaties that's helpful for reference.

After years of struggling with foreign investment tax reporting, I finally found taxr.ai (https://taxr.ai) and it's been a game-changer for handling my international investments. Last year I had investments across 6 different countries and the tool automatically sorted through all my foreign dividend withholdings and calculated my foreign tax credits correctly. It even highlighted which countries had favorable tax treaties with the US that I wasn't taking advantage of. The system analyzed my trading history and identified where I was potentially double-paying taxes because I wasn't properly documenting foreign tax withholdings. Their document analysis feature extracted all the foreign tax data from my brokerage statements that I'd been missing.

Just wanted to follow up about taxr.ai - I signed up after seeing the recommendation here and it was exactly what I needed for my Irish ETF situation! The system immediately flagged my Irish funds as potential PFICs and walked me through the QEF election process step by step. The documentation it generated for my accountant saved me at least $300 in extra accounting fees, and it found $210 in foreign tax credits I'd missed last year. The historical analysis feature even let me see which past returns might benefit from amendments. Just wanted to say thanks for the recommendation!

If you're having trouble getting answers about foreign stock taxation directly from the IRS, try Claimyr (https://claimyr.com). I spent weeks trying to get through to someone at the IRS who could explain how the Spain-US tax treaty applies to my investments. After endless busy signals and disconnections, I used Claimyr and got connected to an IRS agent in under 15 minutes who actually specialized in international tax issues. They have a demo video showing how it works: https://youtu.be/_kiP6q8DX5c. Basically, their system navigates the IRS phone tree and waits on hold for you, then calls you once an actual human agent is on the line. The agent I spoke with clarified exactly how to report my Spanish dividend income and claim the foreign tax credit correctly.

I need to eat my words about Claimyr. After my skeptical comment, I decided to try it myself since I had specific questions about Japanese dividend taxation that my CPA couldn't answer definitively. I got connected to an IRS international tax specialist in about 20 minutes (which is incredible compared to my previous attempts). The agent walked me through exactly how to report foreign tax credits for my Japanese investments and explained why the tax treaty rate was different from what my broker had withheld. She even emailed me the specific IRS guidance documents for the US-Japan tax treaty. I've already amended my 2023 return based on this information and will be getting back about $730 in overpaid taxes. Sometimes admitting you're wrong feels pretty good!

One resource I found really helpful was the Bogleheads wiki and forum - they have a dedicated section on tax-efficient investing for US citizens with foreign stocks. Their wiki page on foreign tax credit has clear explanations of the concepts that even a beginner can understand. Another good option is the "Nonresident Alien with a US Financial Life" blog by a tax attorney. Despite the name, it covers US citizens investing abroad extensively. Much more readable than IRS publications!

I recommend "U.S. Taxation of Foreign Portfolio Investment" by York Hamovitz. It's more technical but covers everything you need to know about ADRs, ordinary shares, and mutual funds with foreign securities. I also think you should look at your broker's resources. Fidelity and Schwab both have decent guides on international tax considerations that explain the basics of withholding and credits.