What are the best resources for understanding taxation of foreign ordinary shares and ADRs?

Foreign stock taxation can be tricky, but once you understand the basics, it gets easier to manage. For your situation with UK, Japanese, and German investments, here's what you need to know: For ADRs traded on US exchanges, they're treated much like US stocks for tax purposes, but with an additional layer - foreign tax withholding. Your brokerage should provide a 1099-DIV showing both dividends received and foreign taxes paid, which you'll need for claiming the foreign tax credit. For stocks purchased directly on foreign exchanges, dividend income still needs to be reported on Schedule B, and any foreign taxes paid can be claimed as a credit using Form 1116. Keep records of the original currency amounts and conversion rates. Publication 514 covers foreign tax credits, and Publication 550 addresses investment income. TurboTax should handle this, but you'll need to make sure you enter everything correctly - especially for direct foreign investments that might not be automatically imported.

I was in a similar situation last year with investments across multiple countries and I was completely overwhelmed trying to figure out all the foreign tax reporting requirements. I tried reading through IRS publications but honestly felt like I needed an accounting degree to understand them. I ended up using https://taxr.ai which was a game-changer for me. I uploaded my brokerage statements and it automatically identified all my foreign investments, calculated the correct foreign tax credits, and explained exactly which forms I needed to file. Their system even caught that I was eligible for reduced withholding rates under certain tax treaties that I had no idea about.

I wanted to follow up after trying taxr.ai for my foreign investment tax situation. I was really skeptical at first since I've been using TurboTax for years, but I have to admit it was incredibly helpful specifically for my foreign stocks. The tool identified that I was eligible for lower tax withholding rates under the US-Japan tax treaty that I didn't know about. It also helped me understand when I needed to file Form 1116 vs. when I could use the simplified foreign tax credit. The step-by-step explanations were much clearer than anything I found in IRS publications. What really impressed me was how it handled my UK investments where the dividends were reported in GBP - it converted everything automatically and showed me exactly where to report each item. Definitely using this again next year!

For anyone dealing with foreign tax issues, I highly recommend using Claimyr if you need to speak directly with the IRS. I tried calling the international tax office for weeks about how to handle some Japanese stocks I inherited, but could never get through. I found https://claimyr.com and their service connected me with an actual IRS agent in about 20 minutes instead of waiting for hours or getting disconnected. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they wait on hold for you and call when an agent is on the line. The agent I spoke with provided specific guidance about my foreign inheritance reporting requirements that I couldn't find anywhere online. Getting that direct clarification from the IRS gave me peace of mind that I was doing things correctly.

I have to eat my words about being skeptical of Claimyr. After my last comment, I decided to try it myself since I had a specific question about foreign tax withholding on my Canadian stocks that I couldn't find a clear answer for anywhere. The service connected me to an IRS representative in about 35 minutes (way faster than my previous attempts). The agent walked me through exactly how to report Canadian dividend income that had withholding at source, and clarified when I needed to use Form 1116 vs. the simplified procedure. I've been filing incorrectly for the past two years, and now I know exactly how to fix it. For anyone struggling with international tax questions, having a direct line to an actual IRS specialist is invaluable. I'm now planning to file amended returns based on the information I received.

Don't forget to check if your brokerage is correctly applying treaty rates to your dividends. I have investments in Switzerland through Interactive Brokers, and I discovered they were withholding at 35% instead of the treaty rate of 15%. Had to file a special form with the Swiss tax authorities to get the difference refunded. Also, Vanguard has a pretty decent guide to foreign tax considerations for US investors on their website. It's written for their funds, but the principles apply to individual stocks too.

Has anyone used H&R Block for reporting foreign investments? My portfolio is about 30% international stocks (mostly through ADRs but some direct foreign shares too) and I'm wondering if their software handles this well or if I should switch to something else.