| Forward International Small Companies Fund, Forward International Equity Fund and Forward Global Emerging Markets Fund have elected to pass through to shareholders the foreign taxes paid on income earned from foreign investments. These foreign taxes are reported in box 6 of your Form 1099-DIV. As a shareholder in one of these Funds, you may be able to claim a tax credit or an itemized deduction on your federal tax return for the amount of tax paid to foreign countries. You should consult your tax advisor to assist you in determining your eligibility to claim either the foreign tax credit or foreign tax deduction and which is in your best interest.
Foreign Tax Credit: If you are eligible to claim a foreign tax credit, you will have to determine if you are required to file Form 1116. You may be able to claim the credit without filing Form 1116 if your 2007 share of foreign tax from all sources is $300 or less ($600 if filing a joint return) and your only foreign source income is interest and dividends. If you are not required to file Form 1116, report the amount from box 6 of Form 1099-DIV on line 47 of Form 1040. The following table provides the information you will need to calculate the foreign tax credit using Form 1116.
Foreign Tax Deduction: If you choose not to claim a credit for foreign tax paid, you may take a deduction by reporting the foreign tax amount from box 6 of Form 1099-DIV on Form 1040, Schedule A.
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