Form 8621 PDF Details

At the heart of international finance and tax compliance, Form 8621 is an essential document for U.S. persons who invest in foreign corporations classified as Passive Foreign Investment Companies (PFICs) or Qualified Electing Funds (QEFs). This form serves a critical role in the Internal Revenue Service's efforts to ensure that U.S. shareholders of foreign investments comply with the complex tax regulations governing PFICs. With sections ranging from shareholder information to summaries of annual information, elections, income reporting from QEFs, and information on distributions and dispositions, Form 8621 captures detailed information necessary for accurate tax reporting. The form allows taxpayers to make various elections that can significantly affect the taxation of their foreign investments, such as electing to treat a PFIC as a QEF or making a mark-to-market election. Each choice has profound tax implications, designed to either mitigate the potentially punitive tax consequences traditionally associated with PFIC investments or to provide an alternative method of computation and reporting that may be more favorable in certain situations. Moreover, the detailed instructions for calculations and elections underscore the complexity and necessity of understanding the intricacies involved in filing this form. Navigating this form requires a careful assessment of one’s investments and a clear strategy for managing the tax consequences of owning shares in a PFIC, highlighting the importance of this document in the landscape of international tax compliance.

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Form NameForm 8621
Form Length4 pages
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Form 8621

(Rev. December 2018)

Department of the Treasury

Internal Revenue Service

Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund

▶Go to www.irs.gov/Form8621 for instructions and the latest information.

OMB No. 1545-1002

Attachment Sequence No. 69

Name of shareholder

Identifying number (see instructions)

 

 

 

 

 

 

 

 

Number, street, and room or suite no. If a P.O. box, see instructions.

Shareholder tax year: calendar year 20

or other tax year

 

 

 

beginning

, 20

and ending

, 20

.

 

 

 

 

 

 

 

City or town, state, and ZIP code or country

 

 

 

 

 

 

Check type of shareholder filing the return:

Individual

Corporation

Partnership

S Corporation

Check if any Excepted Specified Foreign Financial Assets are reported on this form. See instructions

. . . .

Nongrantor Trust

. . . . . . .

Estate

. .

Qualifying Insurance Corporation Election—I, a shareholder of stock of a foreign corporation, elect to treat such stock as the stock of a Qualifying Insurance Corporation under the alternative facts and circumstances test within the meaning of section 1297(f)(2). See instructions . . . . .

Name of foreign corporation, passive foreign investment company (PFIC), or qualified electing fund (QEF)

Employer identification number (if any)

 

 

 

 

 

 

Address (Enter number, street, city or town, and country.)

Reference ID number (see instructions)

 

 

 

 

 

Tax year of foreign corporation, PFIC, or QEF: calendar year 20

 

or other tax year beginning

 

, 20

 

and ending

, 20

.

Part I Summary of Annual Information (see instructions)

Provide the following information with respect to all shares of the PFIC held by the shareholder:

1Description of each class of shares held by the shareholder:

Check if shares jointly owned with spouse.

2Date shares acquired during the tax year, if applicable:

3Number of shares held at the end of the tax year:

4Value of shares held at the end of the tax year (check the appropriate box, if applicable):

(a)

$0–50,000 (b)

$50,001–100,000 (c)

(e)If more than $200,000, list value:

$100,001–150,000 (d)

$150,001–200,000

5Type of PFIC and amount of any excess distribution or gain treated as an excess distribution under section 1291, inclusion under section 1293, and inclusion or deduction under section 1296 (check all boxes that apply):

(a)

(b)

(c)

Section 1291

$

 

 

Section 1293

(Qualified Electing Fund) $

Section 1296

(Mark to Market) $

Part II Elections (see instructions)

A B

C

D

Election To Treat the PFIC as a QEF. I, a shareholder of a PFIC, elect to treat the PFIC as a QEF. Complete lines 6a through 7c of Part III.

Election To Extend Time For Payment of Tax. I, a shareholder of a QEF, elect to extend the time for payment of tax on the undistributed

earnings and profits of the QEF until this election is terminated. Complete lines 8a through 9c of Part III to calculate the tax that may be deferred.

Note: If any portion of line 6a or line 7a of Part III is includible under section 951, you may not make this election. Also, see sections 1294(c) and 1294(f) and the related regulations for events that terminate this election.

Election To Mark-to-Market PFIC Stock. I, a shareholder of a PFIC, elect to mark-to-market the PFIC stock that is marketable within the meaning of section 1296(e). Complete Part IV.

Deemed Sale Election. I, a shareholder on the first day of a PFIC’s first tax year as a QEF, elect to recognize gain on the deemed sale of my

interest in the PFIC. Enter gain or loss on line 15f of Part V.

E

F

Deemed Dividend Election. I, a shareholder on the first day of a PFIC’s first tax year as a QEF that is a controlled foreign corporation (CFC), elect to treat an amount equal to my share of the post-1986 earnings and profits of the CFC as an excess distribution. Enter this amount on

line 15e of Part V. If the excess distribution is greater than zero, also complete line 16 of Part V.

Election To Recognize Gain on Deemed Sale of PFIC. I, a shareholder of a former PFIC or a PFIC to which section 1297(d) applies, elect to treat as an excess distribution the gain recognized on the deemed sale of my interest in the PFIC on the last day of its last tax year as a PFIC under section 1297(a). Enter gain on line 15f of Part V.

G

H

Deemed Dividend Election With Respect to a Section 1297(e) PFIC. I, a shareholder of a section 1297(e) PFIC, within the meaning of Regulations section 1.1297-3(a), elect to make a deemed dividend election with respect to the Section 1297(e) PFIC. My holding period in the stock of the Section 1297(e) PFIC includes the CFC qualification date, as defined in Regulations section 1.1297-3(d). Enter the excess

distribution on line 15e, Part V. If the excess distribution is greater than zero, also complete line 16, Part V.

Deemed Dividend Election With Respect to a Former PFIC. I, a shareholder of a former PFIC, within the meaning of Regulations section 1.1298-3(a), elect to make a deemed dividend election with respect to the former PFIC. My holding period in the stock of the former PFIC includes the termination date, as defined in Regulations section 1.1298-3(d). Enter the excess distribution on line 15e, Part V. If the excess

distribution is greater than zero, also complete line 16, Part V.

For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 64174H

Form 8621 (Rev. 12-2018)

Form 8621 (Rev. 12-2018)

 

 

Page 2

Part III

Income From a Qualified Electing Fund (QEF). All QEF shareholders complete lines 6a through 7c. If you are making

 

Election B, also complete lines 8a through 9c. See instructions.

 

 

 

 

 

 

 

6a Enter your pro rata share of the ordinary earnings of the QEF

6a

 

 

bEnter the portion of line 6a that is included in income under section 951 or that

 

may be excluded under section 1293(g)

6b

 

 

 

c

Subtract line 6b from line 6a. Enter this amount on your tax return as ordinary income

6c

7a

Enter your pro rata share of the total net capital gain of the QEF

7a

 

 

 

bEnter the portion of line 7a that is included in income under section 951 or that

may be excluded under section 1293(g)

7b

 

cSubtract line 7b from line 7a. This amount is a net long-term capital gain. Enter this amount in Part II of the

Schedule D used for your income tax return. See instructions

7c

Complete lines 8 and 9 only if you are making a section 1294 election (Election B) for the current tax year.

 

8a Add lines 6c and 7c . . . . . . . . . . . . . . . . . . . . . . . . . . .

bEnter the total amount of cash and the fair market value of other property distributed

or deemed distributed to you during the tax year of the QEF. See instructions . .

8b

cEnter the portion of line 8a not already included in line 8b that is attributable to shares

in the QEF that you disposed of, pledged, or otherwise transferred during the tax year

8c

d Add lines 8b and 8c . . . . . . . . . . . . . . . . . . . . . . . . . . .

eSubtract line 8d from line 8a, and enter the difference (if zero or less, enter amount in brackets) . . . . .

Important: If line 8e is greater than zero, and no portion of line 6a or 7a is includible in income under section 951, you may make Election B with respect to the amount on line 8e.

9a Enter the total tax for the tax year. See instructions

9a

bEnter the total tax for the tax year determined without regard to the amount

entered on line 8e

9b

cSubtract line 9b from line 9a. This is the deferred tax, the time for payment of which is extended by making Election B. See instructions . . . . . . . . . . . . . . . . . . . . . .

8a

8d

8e

9c

Part IV Gain or (Loss) From Mark-to-Market Election (see instructions)

10a

Enter the fair market value of your PFIC stock at the end of the tax year

b

Enter your adjusted basis in the stock at the end of the tax year

cSubtract line 10b from line 10a. If a gain, do not complete lines 11 and 12. Include this amount as ordinary

 

income on your tax return. If a loss, go to line 11

11

Enter any unreversed inclusions (as defined in section 1296(d))

12Enter the loss from line 10c, but only to the extent of unreversed inclusions on line 11. Include this amount as

 

an ordinary loss on your tax return

13

If you sold or otherwise disposed of any section 1296 stock (see instructions) during the tax year:

a

Enter the fair market value of the stock on the date of sale or disposition

. . . . . . . . . . .

b

Enter the adjusted basis of the stock on the date of sale or disposition

cSubtract line 13b from line 13a. If a gain, do not complete line 14. Include this amount as ordinary income on

your tax return. If a loss, go to line 14 . . . . . . . . . . . . . . . . . . . . . .

14a Enter any unreversed inclusions (as defined in section 1296(d))

. . . . . . . . . . . . . .

bEnter the loss from line 13c, but only to the extent of unreversed inclusions on line 14a. Include this amount as an ordinary loss on your tax return. If the loss on line 13c exceeds unreversed inclusions on line 14a, complete

line 14c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

cEnter the amount by which the loss on line 13c exceeds unreversed inclusions on line 14a. Include this amount on your tax return according to the rules generally applicable for losses provided elsewhere in the Code and

regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Note: See instructions in case of multiple sales or dispositions.

10a

10b

10c

11

12

13a

13b

13c

14a

14b

14c

Form 8621 (Rev. 12-2018)

Form 8621 (Rev. 12-2018)

Page 3

Part V

Distributions From and Dispositions of Stock of a Section 1291 Fund (see instructions)

 

 

Complete a separate Part V for each excess distribution and disposition. See instructions.

 

15a Enter your total distributions from the section 1291 fund during the current tax year with respect to the applicable stock. If the holding period of the stock began in the current tax year, see instructions . . . .

bEnter the total distributions (reduced by the portions of such distributions that were excess distributions but not included in income under section 1291(a)(1)(B)) made by the fund with respect to the applicable stock for each of the 3 years preceding the current tax year (or if shorter, the portion of the shareholder’s holding period

 

before the current tax year)

c

Divide line 15b by 3.0. (See instructions if the number of preceding tax years is less than 3.)

d

Multiply line 15c by 125% (1.25)

eSubtract line 15d from line 15a. This amount, if more than zero, is the excess distribution with respect to the applicable stock. If there is an excess distribution, complete line 16. If zero or less and you did not dispose of stock during the tax year, do not complete the rest of Part V. See instructions if you received more than one

distribution during the current tax year. Also, see instructions for rules for reporting a nonexcess distribution on your income tax return . . . . . . . . . . . . . . . . . . . . . . . . . .

fEnter gain or loss from the disposition of stock of a section 1291 fund or former section 1291 fund. If a gain, complete line 16. If a loss, show it in brackets and do not complete line 16 . . . . . . . . . . .

16a If there is a positive amount on line 15e or 15f (or both), attach a statement for each excess distribution and disposition. Show your holding period for each share of stock or block of shares held. Allocate the excess distribution or gain to each day in your holding period. Add all amounts that are allocated to days in each tax year.

bEnter the total of the amounts determined in line 16a that are allocable to the current tax year and tax years before the foreign corporation became a PFIC (pre-PFIC years). Enter these amounts on your income tax return as other income

cEnter the aggregate increases in tax (before credits) for each tax year in your holding period (other than the

current tax year and pre-PFIC years). See instructions . . . . . . . . . . . . . . . . .

d Foreign tax credit (see instructions)

. . . . . . . . . . . . . . . . . . . . . .

eSubtract line 16d from line 16c. Enter this amount on your income tax return as “additional tax.” See instructions

fDetermine interest on each net increase in tax determined on line 16e using the rates and methods of section 6621. Enter the aggregate amount of interest here. See instructions . . . . . . . . . . . . .

15a

15b

15c

15d

15e

15f

16b

16c

16d

16e

16f

Form 8621 (Rev. 12-2018)

Form 8621 (Rev. 12-2018)

Page 4

Part VI

Status of Prior Year Section 1294 Elections and Termination of Section 1294 Elections

 

Complete a separate column for each outstanding election.

 

Complete lines 17 through

 

 

 

 

 

 

 

 

20 to report the status of

 

 

 

 

 

 

 

 

outstanding prior year

 

 

 

 

 

 

 

 

section 1294 elections.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(i)

(ii)

(iii)

(iv)

(v)

 

(vi)

17

Tax year of outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

election

 

 

 

 

 

 

 

18

Undistributed earnings to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

which the election relates .

 

 

 

 

 

 

 

19

Deferred tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20

Interest accrued on deferred

 

 

 

 

 

 

 

 

tax (line 19) as of the filing date

 

 

 

 

 

 

 

 

Complete lines 21 through 24

 

 

 

 

 

 

 

 

only if a section 1294

 

 

 

 

 

 

 

 

election is terminated in the

 

 

 

 

 

 

 

 

current year.

 

 

 

 

 

 

 

21

Event terminating election .

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

Earnings distributed or

 

 

 

 

 

 

 

 

deemed distributed during the

 

 

 

 

 

 

 

 

tax year

 

 

 

 

 

 

 

23

Deferred tax due with this

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

return

 

 

 

 

 

 

 

24

Accrued interest due with this

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

return

 

 

 

 

 

 

 

 

Complete lines 25 and 26

 

 

 

 

 

 

 

 

only if there is a partial

 

 

 

 

 

 

 

 

termination of a section

 

 

 

 

 

 

 

 

1294 election in the current

 

 

 

 

 

 

 

 

tax year.

 

 

 

 

 

 

 

25

Deferred tax outstanding after

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

partial termination of election.

 

 

 

 

 

 

 

 

Subtract line 23 from line 19 .

 

 

 

 

 

 

 

26

Interest accrued after partial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

termination of election.

 

 

 

 

 

 

 

 

Subtract line 24 from line 20 .

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Form 8621 (Rev. 12-2018)

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This document requires particular info to be filled in, hence ensure that you take the time to provide what's required:

1. Fill out your Form 8621 with a number of essential fields. Collect all the necessary information and be sure there's nothing neglected!

The way to prepare Form 8621 portion 1

2. Now that this segment is done, you're ready to include the needed details in If more than list value, Type of PFIC and amount of any, c Part II, Section Section Qualified, Election To Treat the PFIC as a, Election To Extend Time For, Note If any portion of line a or, Election To MarktoMarket PFIC, Deemed Sale Election I a, Deemed Dividend Election I a, Election To Recognize Gain on, and Deemed Dividend Election With so that you can move on to the next step.

c Part II, Election To Extend Time For, and Election To Treat the PFIC as a of Form 8621

3. This next portion is all about Part III, Income From a Qualified Electing, a Enter your pro rata share of the, Enter the portion of line a that, c Subtract line b from line a, a Enter your pro rata share of the, Enter the portion of line a that, Subtract line b from line a This, a Add lines c and c, Enter the total amount of cash and, Enter the portion of line a not, d Add lines b and c e Subtract, Important If line e is greater, a Enter the total tax for the tax, and Enter the total tax for the tax - fill out all of these empty form fields.

d Add lines b and c e Subtract, Enter the total tax for the tax, and a Add lines c and c in Form 8621

4. This next section requires some additional information. Ensure you complete all the necessary fields - Enter the total tax for the tax, Part IV Gain or Loss From, b Enter your adjusted basis in the, Subtract line b from line a If a, Enter the loss from line c but, If you sold or otherwise disposed, a Enter the fair market value of, Subtract line b from line a If a, a Enter any unreversed inclusions, Enter the loss from line c but, Enter the amount by which the loss, and Form Rev - to proceed further in your process!

The best ways to fill out Form 8621 step 4

5. This document should be wrapped up by filling out this area. Here one can find a comprehensive listing of form fields that need appropriate information for your document usage to be accomplished: Enter your total distributions, Enter the total distributions, c Divide line b by See, Subtract line d from line a This, Enter gain or loss from the, If there is a positive amount on, Enter the total of the amounts, and Enter the aggregate increases in.

Learn how to complete Form 8621 stage 5

It is easy to make a mistake when filling out the Enter your total distributions, and so make sure that you reread it before you finalize the form.

Step 3: Confirm that the information is accurate and simply click "Done" to conclude the task. Sign up with FormsPal right now and easily gain access to Form 8621, all set for downloading. Each and every edit you make is handily kept , which enables you to change the document at a later stage if needed. FormsPal guarantees safe document completion devoid of personal information record-keeping or sharing. Rest assured that your data is safe here!

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