5074 Allocation of Individual Income Tax to Guam or the Commo

Form

5074

Allocation of Individual Income Tax to Guam or the
Commonwealth of the Northern Mariana Islands (CNMI)

Department of the Treasury
Internal Revenue Service

©

Attach to Form 1040.

Income From Guam or the CNMI Reported on Form 1040

Wages, salaries, tips, etc.
Taxable interest
Ordinary dividends
Taxable refunds, credits, or offsets of local Guam or CNMI income taxes
Alimony received
Business income or (loss)
Capital gain or (loss)
Other gains or (losses)
IRA distributions (taxable amount)
Pensions and annuities (taxable amount)
Rental real estate, royalties, partnerships, S corporations, trusts, etc.
Farm income or (loss)
Unemployment compensation
Social security benefits (taxable amount)
Other income. List type and amount ©
©
Total income. Add lines 1 through 15

Part II
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CNMI

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Adjusted Gross Income From Guam or the CNMI Reported on Form 1040

Educator expenses
Certain business expenses of reservists, performing artists, and
fee-basis government officials
Health savings account deduction
Moving expenses
One-half of self-employment tax
Self-employed SEP, SIMPLE, and qualified plans
Self-employed health insurance deduction
Penalty on early withdrawal of savings
IRA deduction
Student loan interest deduction
Tuition and fees deduction
Add lines 17 through 27
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Adjusted gross income. Subtract line 28 from line 16

Part III

60

Your social security number

Guam
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2007
Attachment
Sequence No.

Name(s) shown on Form 1040

Part I

OMB No. 1545-0074

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25
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Payments of Income Tax to Guam or the CNMI

Payments on estimated tax return filed with Guam or the CNMI
Income tax withheld from your wages while employed by the U.S.
Government as a civilian in Guam or the CNMI
Income tax withheld from your wages while employed as a member of
the U.S. Armed Forces in Guam or the CNMI
Income tax withheld from your wages earned in Guam or the CNMI other
than amounts on lines 30 through 32
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Total payments. Add lines 30 through 33

30
31
32
33
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Section references are to the Internal Revenue Code unless
otherwise noted.

(CNMI). See chapter 1 of Pub. 570, Tax Guide for Individuals
With Income From U.S. Possessions, for more information.

Instructions

● If, in tax year 2001 or later, you became or ceased to be a
bona fide resident of a U.S. possession, you may be required to
file Form 8898, Statement for Individuals Who Begin or End
Bona Fide Residence in a U.S. Possession. The penalty for
failure to provide the required information is $1,000. For details,
see the Instructions for Form 8898.

Reminders
● For tax years ending after January 31, 2006 (or beginning with
tax year 2006 if a calendar year taxpayer), changes have been
made to the rules for determining if you are a bona fide resident
of Guam or the Commonwealth of the Northern Mariana Islands
For Paperwork Reduction Act Notice, see back of form.

(Continued on back)

Cat. No. 42243X

Form

5074

(2007)

Form 5074 (2007)

Purpose of form. Form 5074 provides information to the United
States so the IRS can figure the individual income tax that is due
to Guam or the CNMI.
Who must file. If you were a U.S. citizen or resident alien (other
than a bona fide resident of Guam or the CNMI), you may need to
file Form 5074. Complete this form if all of the following apply to
you (and to your spouse if filing a joint return).
● You file a U.S. income tax return.
● You report AGI of $50,000 or more.
● At least $5,000 of the gross income on your return is from either
Guam or CNMI sources.
Do not use this form if you were a bona fide resident
of Guam or the CNMI during the entire tax year.
CAUTION

Joint returns. If you file jointly and only one spouse is a bona
fide resident of Guam or the CNMI for the entire tax year, the
resident status for both spouses and subsequent tax treatment
is determined by the spouse with the higher adjusted gross
income (AGI) (disregarding community property laws). File Form
5074 only if the spouse with the higher AGI is not a bona fide
resident of Guam or the CNMI for the entire tax year.
Where to file. File your Form 1040 (including Form 5074) with
the Department of the Treasury, Internal Revenue Service Center,
Austin, TX 73301-0215.
Additional information. Pub. 570 has more information and an
example of how to complete Form 5074. To get Pub. 570, see
Quick and Easy Access to Tax Help and Tax Products in the
instructions for Form 1040.

Part I—Income From Guam or the CNMI
Reported on Form 1040
Source of income. The rules for determining the source of
income are explained in sections 861 through 865, section 937,
in Temporary Regulations section 1.937-2T, and in Pub. 570.
Some general rules are:
● The source of wages, salaries, or tips is generally where the
services are performed. If you worked both in and outside Guam
or the CNMI, include on line 1 only wages, salaries, or tips
earned while you were in Guam or the CNMI.
● The source of interest income is generally where the payer is
located. For example, Guam or CNMI source income includes
interest from a certificate of deposit issued by a bank or branch
of a U.S. bank in Guam or the CNMI.
● Generally, dividends are sourced where the paying corporation
is created or organized.
● Taxable refunds, credits, or offsets of local Guam or CNMI
income taxes only include nonmirror code income taxes.
● Alimony received from a person who is a bona fide resident of
Guam or the CNMI is sourced in that specific possession.
● Except as provided in regulations, income earned after
December 31, 2004, that is from sources within the United
States or effectively connected with the conduct of a trade or
business in the United States is not income from Guam or the
CNMI.
Personal property. The source of income from the sale of
nondepreciable personal property is generally the seller’s tax
home. Income from the sale of inventory is generally sourced
where the title to the property passes. See section 865 for details.

Page

2

Special rules may apply to bona fide residents of U.S.
possessions who have gain from dispositions of
certain investment property within the 10-year period
beginning when they became a bona fide resident.
CAUTION
For details, see chapter 2 of Pub. 570, Temporary
Regulations section 1.937-2T(f)(1), and Example 2 of section
1.937-2T(k).

Part II—Adjusted Gross Income From
Guam or the CNMI Reported on Form 1040
Lines 21 through 23. If you had Guam or CNMI source
self-employment income, figure the amount to enter on each line
by (1) dividing your Guam or CNMI source self-employment
income by your total (worldwide) self-employment income, and (2)
multiplying the total amount of each deduction that applies to you
by the result in (1).
Line 24. Enter the amount of penalty on early withdrawals from
savings accounts in banks or branches of U.S. banks located in
Guam or the CNMI. The Form 1099-INT or Form 1099-OID you
received will show the amount of any penalty you were charged.
Line 25. Enter the total of your and your spouse’s IRA deductions
attributable to Guam or CNMI compensation or earned income.
Figure the amount to report on line 25 by (1) dividing your Guam
or CNMI compensation or earned income by your total
(worldwide) compensation or earned income, and (2) multiplying
the amount of your IRA deduction by the result in (1). Figure the
amount of your spouse’s IRA deduction the same way.
Line 28. Include in the total on line 28 the amount of any other
deductions included on Form 1040, line 36, that are attributable to
your Guam or CNMI income. On the dotted line next to line 28,
enter the amount of each deduction attributable to your Guam or
CNMI income and identify it as you did on Form 1040, line 36. If
you or your spouse had an Archer MSA deduction on Form 1040,
line 36, figure the amount to report on line 28 the same way you
would an IRA deduction (see Line 25, above).

Penalty for Failure To Furnish Information
If you fail to provide the required information, you may have to
pay a $1,000 penalty for each failure unless you can show the
failure was due to reasonable cause and not willful neglect. This
penalty is in addition to any criminal penalty provided by law.
Paperwork Reduction Act Notice. We ask for the information on
this form to carry out the Internal Revenue laws of the United
States. You are required to give us the information. We need it to
ensure that you are complying with these laws and to allow us to
figure and collect the right amount of tax.
You are not required to provide the information requested on a
form that is subject to the Paperwork Reduction Act unless the
form displays a valid OMB control number. Books or records
relating to a form or its instructions must be retained as long as
their contents may become material in the administration of any
Internal Revenue law. Generally, tax returns and return information
are confidential, as required by section 6103.
The average time and expenses required to complete and file
this form will vary depending on individual circumstances. For the
estimated averages, see the instructions for your income tax
return.
If you have suggestions for making this form simpler, we would
be happy to hear from you. See the instructions for your income
tax return.