A mutual fund that has more than 50% of its assets invested in foreign securities at the close of its taxable year can pass a credit to its shareholders for foreign taxes paid. The foreign tax is based on the income the mutual fund received from its investments in foreign stocks and bonds and the taxes the fund paid to foreign governments at the mutual fund level.
The amount of foreign tax credit is reported to shareholders on Form 1099-DIV, Dividends and Distributions, Box 6. For RiverSource® and certain Threadneedle® funds, this is new for the 2009 tax year. When filing taxes, the credit may be taken directly on Form 1040 provided that all of your foreign source income is from interest or dividends and your total foreign tax credit is $300 or less ($600 or less if married filing jointly). Above these amounts, Form 1116, Foreign Tax Credit (Individual, Estate, or Trust)1 can be used or alternatively the amount can be included in your itemized deductions as a tax paid (although the credit is usually more beneficial). Consult your tax advisor about your particular situation.
In this example, the fund earns $100 of dividend income in England. Of that amount $15 is withheld and paid to Inland Revenue (the taxing body in England) and the remaining amount of $85 is paid to shareholders. The fund reports the entire amount of $100 in dividend income plus a $15 foreign tax credit to the shareholder using Form 1099-DIV. The shareholder who received $85 in cash, reports the total dividend of $100 as income on their tax return. Assuming a 15% tax rate2 on qualified dividend income, they would owe $15 in tax. To offset this tax they use their $15 foreign tax credit and keep the entire amount of $85 paid to them by the fund.
1 Foreign country breakdown or source of income is no longer needed to complete Form 1116 for income passed through from a mutual fund.
2 The maximum tax rate on qualified dividend income of 15% is in effect through 2010 unless Congress acts.
| Fund | Foreign Source Income | Foreign Tax Credit Rate |
| RiverSource 120/20 Contrarian Equity | 0.000000% | 0.000000 |
| RiverSource Absolute Return Currency and Income | 0.000000% | 0.000000 |
| RiverSource Balanced | 0.000000% | 0.000000 |
| RiverSource California Tax-Exempt | 0.000000% | 0.000000 |
| RiverSource Cash Management | 0.000000% | 0.000000 |
| RiverSource Disciplined Equity | 0.000000% | 0.000000 |
| RiverSource Disciplined International Equity | 70.843868% | 0.010945 |
| RiverSource Disciplined Large Cap Growth | 0.000000% | 0.000000 |
| RiverSource Disciplined Large Cap Value Fund | 0.000000% | 0.000000 |
| RiverSource Disciplined Small and Mid Cap Equity | 0.000000% | 0.000000 |
| RiverSource Disciplined Small Cap Value | 0.000000% | 0.000000 |
| RiverSource Diversified Bond | 0.000000% | 0.000000 |
| RiverSource Diversified Equity Income | 0.000000% | 0.000000 |
| RiverSource Dividend Opportunity | 0.000000% | 0.000000 |
| RiverSource Emerging Markets Bond | 79.035953% | 0.004801 |
| RiverSource Equity Value | 0.000000% | 0.000000 |
| RiverSource Floating Rate | 0.000000% | 0.000000 |
| RiverSource Global Bond | 39.186198% | 0.000229 |
| RiverSource Global Technology | 0.000000% | 0.000000 |
| RiverSource Government Money Market | 0.000000% | 0.000000 |
| RiverSource Growth | 0.000000% | 0.000000 |
| RiverSource High Yield Bond | 0.000000% | 0.000000 |
| RiverSource Income Builder Basic Income | 0.000000% | 0.000000 |
| RiverSource Income Builder Enhanced Income | 0.000000% | 0.000000 |
| RiverSource Income Builder Moderate Income | 0.000000% | 0.000000 |
| RiverSource Income Opportunities | 0.000000% | 0.000000 |
| RiverSource Inflation Protected Securities | 0.000000% | 0.000000 |
| RiverSource Intermediate Tax-Exempt | 0.000000% | 0.000000 |
| RiverSource Large Cap Equity | 0.000000% | 0.000000 |
| RiverSource Large Cap Value | 0.000000% | 0.000000 |
| RiverSource LaSalle Global Real Estate | 0.000000% | 0.000000 |
| RiverSource LaSalle International Real Estate | 0.000000% | 0.000000 |
| RiverSource LaSalle Monthly Dividend Real Estate | 0.000000% | 0.000000 |
| RiverSource Limited Duration Bond | 0.000000% | 0.000000 |
| RiverSource Mid Cap Growth | 0.000000% | 0.000000 |
| RiverSource Mid Cap Value | 0.000000% | 0.000000 |
| RiverSource Minnesota Tax-Exempt | 0.000000% | 0.000000 |
| RiverSource New York Tax-Exempt | 0.000000% | 0.000000 |
| RiverSource Partners Aggressive Growth | 0.000000% | 0.000000 |
| RiverSource Partners Fundamental Value | 0.000000% | 0.000000 |
| RiverSource Partners International Select Growth | 81.866085% | 0.011271 |
| RiverSource Partners International Select Value | 89.916804% | 0.017984 |
| RiverSource Partners International Small Cap | 100.000000% | 0.009622 |
| RiverSource Partners Select Value | 0.000000% | 0.000000 |
| RiverSource Partners Small Cap Equity | 0.000000% | 0.000000 |
| RiverSource Partners Small Cap Growth | 0.000000% | 0.000000 |
| RiverSource Partners Small Cap Value | 0.000000% | 0.000000 |
| RiverSource Portfolio Builder Moderate Aggressive | 0.000000% | 0.000000 |
| RiverSource Portfolio Builder Moderate Conservative | 0.000000% | 0.000000 |
| RiverSource Portfolio Builder Aggressive | 0.000000% | 0.000000 |
| RiverSource Portfolio Builder Conservative | 0.000000% | 0.000000 |
| RiverSource Portfolio Builder Moderate | 0.000000% | 0.000000 |
| RiverSource Portfolio Builder Total Equity | 0.000000% | 0.000000 |
| RiverSource Precious Metals and Mining | 0.000000% | 0.000000 |
| RiverSource Real Estate | 0.000000% | 0.000000 |
| RiverSource Recovery and Infrastructure | 0.000000% | 0.000000 |
| RiverSource Retirement Plus 2010 | 0.000000% | 0.000000 |
| RiverSource Retirement Plus 2015 | 0.000000% | 0.000000 |
| RiverSource Retirement Plus 2020 | 0.000000% | 0.000000 |
| RiverSource Retirement Plus 2025 | 0.000000% | 0.000000 |
| RiverSource Retirement Plus 2030 | 0.000000% | 0.000000 |
| RiverSource Retirement Plus 2035 | 0.000000% | 0.000000 |
| RiverSource Retirement Plus 2040 | 0.000000% | 0.000000 |
| RiverSource Retirement Plus 2045 | 0.000000% | 0.000000 |
| RiverSource S&P 500 Index | 0.000000% | 0.000000 |
| RiverSource Short Duration U.S. Government | 0.000000% | 0.000000 |
| RiverSource Short-Term Cash | 0.000000% | 0.000000 |
| RiverSource Small Cap Advantage | 0.000000% | 0.000000 |
| RiverSource Small Company Index | 0.000000% | 0.000000 |
| RiverSource Strategic Allocation | 0.000000% | 0.000000 |
| RiverSource Strategic Income Allocation | 0.000000% | 0.000000 |
| RiverSource Tax-Exempt Bond | 0.000000% | 0.000000 |
| RiverSource Tax-Exempt High Income | 0.000000% | 0.000000 |
| RiverSource Tax-Exempt Money Market | 0.000000% | 0.000000 |
| RiverSource U.S. Government Mortgage | 0.000000% | 0.000000 |
| Threadneedle Asia Pacific | 59.576469% | 0.003486 |
| Threadneedle Emerging Markets | 100.000000% | 0.011980 |
| Threadneedle European Equity | 93.105665% | 0.013110 |
| Threadneedle Global Equity | 78.934038% | 0.005928 |
| Threadneedle Global Equity Income Fund | 39.678128% | 0.023285 |
| Threadneedle Global Extended Alpha Fund | 0.000000% | 0.000000 |
| Threadneedle International Opportunity | 84.752863% | 0.016842 |
"Standard & Poors®", "S&P", "S&P 500®", and "Standard & Poor's 500®" are trademarks of the McGraw-Hill Companies, Inc. These trademarks and service marks have been licensed for use by Ameriprise Financial, Inc. The Funds are not sponsored, endorsed, sold or promoted by Standard & Poor's or any of their subsidiaries or affiliates (the "Licensors") and the Licensors make no representation regarding the advisability of investing in the Funds.
An investment in money market funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to maintain the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
This information is for use with concurrent or prior delivery of a fund prospectus. Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. To learn more about this and other important information about each fund, download a free prospectus. The prospectus should be read carefully before investing.
Investment products are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.
Columbia Management Investment Advisers, LLC and its affiliates do not offer tax or legal advice. Consult with your tax advisor or attorney regarding your specific situation.
Not all products and all share classes are available through all firms.
RiverSource®, Seligman® and Threadneedle® mutual funds are distributed by Columbia Management Investment Distributors, Inc. (formerly known as RiverSource Fund Distributors, Inc.), member FINRA and managed by Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC). Threadneedle mutual funds are subadvised by Threadneedle International Limited, an affiliate of Columbia Management. Seligman is an offering brand of Columbia Management.