We have a question on the 1042-S, box 1, income codes. The list provided with the forms is confusing and we are having trouble determining which income code is correct...


Q. (cont.) We purchased goods from a foreign vendor, but don't believe it falls into any of the list categories.

A. If all you purchased was tangible goods from the Canadian vendor, then you do not have a reporting obligation on the payment. However, you should be certain to document that the payment is exempt with the PO, contract or invoice showing that the transaction was in fact for purchase of goods, not services.

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