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If a joint return, spouse’s first name and initial Last name Spouse’s social security number
Present home address (number and street) Apt. no. City, town or post office, state or territory, and ZIP code
Instructions Additional Information.—Pub. 570, Tax ● Foreign personal holding company income
Guide for Individuals With Income From U.S. included in gross income.
Section references are to the Internal Possessions, has an example of how to
Revenue Code. ● Subpart F income included in gross
complete Form 8689. See Quick and Easy income.
Paperwork Reduction Act Notice.—We ask Access to Tax Help and Forms in the
for the information on this form to carry out Instructions for Form 1040. ● Interest.
the Internal Revenue laws of the United ● Dividends.
States. You are required to give us the Part I—Income From the Virgin
information. We need it to ensure that you are Islands Part II—Adjustments to Income
complying with these laws and to allow us to
figure and collect the right amount of tax. Source of Income.—The rules for From the Virgin Islands
determining the source of income are Lines 17a and 17b.—Enter the amount of
You are not required to provide the discussed in detail in sections 861 through
information requested on a form that is your IRA deduction attributable to
865. Some general rules are: compensation or earned income (as defined
subject to the Paperwork Reduction Act
unless the form displays a valid OMB control ● The source of wages, salaries, or tips is in section 219(f)(1)) derived from the Virgin
number. Books or records relating to a form generally where the services are performed. If Islands. To figure this amount: (a) divide the
or its instructions must be retained as long as you worked both in and outside the Virgin total amount of Virgin Islands compensation
their contents may become material in the Islands, include on line 1 only wages, salaries, or earned income by the total amount of your
administration of any Internal Revenue law. or tips earned while you were in the Virgin compensation or earned income, (b) multiply
Generally, tax returns and return information Islands. the amount of your IRA deduction by the
are confidential, as required by section 6103. ● The source of interest income is generally result in (a). Use the same method to figure
where the payer is located. For example, the amount of your spouse’s IRA deduction
The time needed to complete and file this to enter on line 17b.
form will vary depending on individual interest from a certificate of deposit issued by
circumstances. The estimated average time a Virgin Islands bank or a Virgin Islands Line 19.—Enter the amount of your self-
is: Recordkeeping, 33 min.; Learning about branch of a U.S. bank is Virgin Islands source employment tax deduction attributable to
the law or the form, 18 min.; Preparing the income. self-employment income earned in the Virgin
form, 59 min.; and Copying, assembling, ● Generally, dividends are sourced where the Islands. To figure this amount: (a) divide the
and sending the form to the IRS, 20 min. paying corporation is incorporated. amount of Virgin Islands source
self-employment income used to figure the
If you have comments concerning the ● Taxable refunds, credits, or offsets of local deduction by the total self-employment
accuracy of these time estimates or Virgin Islands income taxes only include income used to figure the deduction, (b)
suggestions for making this form simpler, we nonmirror code income taxes. multiply the amount of your self-employment
would be happy to hear from you. You can ● Alimony received from a person who is a tax deduction by the result in (a).
write or call the IRS. See the Instructions for bona fide resident of the Virgin Islands is
Form 1040. Line 20.—Enter the amount of your
Virgin Islands source income. self-employed health insurance deduction
Purpose of Form.—If you were a citizen or ● The source of income from the sale of attributable to self-employment income
resident of the United States and you had nondepreciable personal property is the earned in the Virgin Islands. To figure this
income from sources in the Virgin Islands or country of the seller’s residence. There is a amount: (a) divide the amount of Virgin
income effectively connected with the special rule, however, for U.S. citizens and Islands source self-employment income used
conduct of a trade or business in the Virgin resident aliens who sell personal property to figure the deduction by the total
Islands, you may owe tax to the Virgin Islands while maintaining a tax home abroad. Any self-employment income used to figure the
on that income. Your Virgin Islands tax gain from such sales may be treated as deduction, (b) multiply the amount of your
liability is a percentage of your U.S. tax foreign source income only if a tax of at least self-employed health insurance deduction by
liability. Use Form 8689 to figure the amount 10% of the gain is paid to a foreign country. the result in (a).
of U.S. tax allocable to the Virgin Islands. Do Income from the sale of inventory is generally
not use this form if you were a bona fide Line 21.—Enter the amount of your Keogh
sourced where the title to the property retirement plan and self-employed SEP
resident of the Virgin Islands on the last day passes.
of the tax year. deduction attributable to self-employment
The portion of gain from the sale of income earned in the Virgin Islands. To figure
Credit for U.S. Tax Allocable to the Virgin depreciable personal property used in a trade this amount: (a) divide the amount of Virgin
Islands.—You can take a credit on your U.S. or business that reflects allowable Islands source self-employment income by
return for the U.S. tax allocable to the Virgin depreciation deductions and gain (to the the total amount of your self-employment
Islands only if you paid the tax to the Virgin extent of amortization deductions) from the income, (b) multiply the total amount of your
Islands. To take the credit, you must sale of intangible property, such as a patent, Keogh retirement plan and self-employed
complete Form 8689 and attach it to your copyright, trademark, franchise, or similar SEP deduction by the result in (a).
Form 1040. The credit is claimed on Form property, is sourced where the original
1040, line 58. Line 22.—Enter the amount of penalties on
deductions of the property were sourced. For early withdrawal of savings from accounts in
Where To File.—You must file identical tax depreciable personal property, gain in excess Virgin Islands banks or Virgin Islands
returns with the United States and the Virgin of these depreciation deductions is sourced branches of U.S. banks. The Form 1099-INT
Islands. File your original Form 1040 as if the property were inventory. For or, if applicable, Form 1099-OID given to you
(including Form 8689) with the Internal intangible property, gain in excess of by your bank will show the amount of any
Revenue Service Center, Philadelphia, PA amortization deductions is sourced under the penalty you were charged because you
19255-0002. general residence of the seller rule if the withdrew funds from your time savings
File a copy of your Form 1040 (with copies payments are not contingent on productivity, deposit before its maturity.
of all attachments, forms, and schedules, use, or disposition of the intangible property,
and under the place of use rule for royalties if Part IV—Payments of Income Tax
including Form 8689) with the Virgin Islands
Bureau of Internal Revenue, 9601 Estate the payments are contingent. See section to the Virgin Islands
Thomas, Charlotte Amalie, 865 for details. Note: Amounts overpaid to the United States
St. Thomas, VI 00802. They will accept a ● See section 863(c) for rules on determining will not be applied to the amount you owe to
copy of your U.S. return and process it as an the source of income attributable to the Virgin Islands. Similarly, amounts overpaid
original return. transportation services that begin or end in to the Virgin Islands will not be applied to the
If you file a joint return, file it in the the United States or a U.S. possession. See amount you owe to the United States.
jurisdiction required for the spouse who had section 863(d) for rules on income from space Penalty for Failure To Furnish
the higher adjusted gross income for the tax or ocean activities. Information.—If you do not furnish the
year, determined without regard to Part of the following types of income information we require, you may have to pay
community property laws. derived from a U.S.-owned foreign a penalty of $100 for each failure, unless you
corporation that has income from U.S. can show your failure was due to reasonable
sources may be required to be treated as cause and not willful neglect. This penalty is
U.S. source income. in addition to any criminal penalty provided
by law.