Do you have to file Form 8621?

So, do I need to file Form 8621? If you are a direct or indirect shareholder of a PFIC, you are required to file IRS Form 8621 for each year that you: Recognize gain on a direct or indirect disposition of PFIC stock, or. Receive certain direct or indirect distributions from a PFIC, or.

Who must file Form 8621?

More In Forms and Instructions A U.S. person that is a direct or indirect shareholder of a passive foreign investment company (PFIC) files Form 8621 if they: Receive certain direct or indirect distributions from a PFIC. Recognize a gain on a direct or indirect disposition of PFIC stock.

Are there penalties for not filing Form 8621?

Penalties for failure to file Form 8621 could include a $10,000 penalty (under Form 8938), and suspension of the statute of limitations with respect to the U.S. shareholder’s entire tax return until Form 8621 is filed.

Does TurboTax have Form 8621?

TurboTax does not support Form 8621. However, if you are knowledgeable in how to complete the form, you may complete it manually and attach it to a tax return that you print and file by mail.

Do I need to report PFIC?

PFIC reporting is the requirement that US citizens or green card holders, who indirectly or directly own shares in a PFIC at any time during the year, must file Form 8621 with the IRS. As this is an additional and often complex form, you will need to pay your tax advisor additional fees to prepare these.

Who Must File 8938?

Unmarried individuals residing in the United States are required to file Form 8938 if the market value of their foreign financial assets is greater than $50,000 on the last day of the year or greater than $75,000 at any time during the year.

Can partnerships be PFICs?

A partnership is not a PFIC even if all of its income is from passive investments. The same is true with respect to any trust or estate that does not own any shares of any PFIC. A PFIC is a corporation (by definition) and in most cases, a trust or partnership would not be a PFIC.

How do you tell if a stock is a PFIC?

You can generally tell if a foreign corporation or foreign investment fund is considered a passive foreign investment company (PFIC) if it meets one of the following two characteristics: 75\% or more of its gross income for the taxable year is passive income, or.

What is QEF income?

The QEF or Qualified Electing Fund election under §1295 is optional method of taxation available for certain PFICs. This election most closely mirrors the US taxation of US mutual funds and allows for capital gains treatment of some of the income as long as any prior §1291 gain has been dealt with.

Can Form 8621 be filed electronically?

You can file Form 8621 online with H&R Block’s Expat Tax Services. You may have to file more than one form—if you’re required to file Form 8621, you must file a form for each PFIC in which stock is held.

What qualifies as PFIC?

A foreign corporation is a deemed passive foreign investment company (PFIC) if 75\% or more of its gross income is from non-business operational activities (the income test), or at least 50\% of its average percentage of assets is held for the production of passive income (the asset test).

How do you determine if a fund is a PFIC?

Under the income test, a foreign corporation is treated as a PFIC if 75 percent or more of its gross income fits within the definition of ‘passive income’, which generally includes dividends, interest, royalties, rents, and annuities; there are many other special rules for determining what income is included.