PFIC update on Canadian mutual funds

Not an update in that the rules didn’t change, just an update in my reasoning. After reading the private ruling letter #200752029, my opinions tilts even towards the idea that Canadian mutual funds are not corporations and as such the PFIC rules shouldn’t apply to such investments. Following the logic presented in the private ruling, absent ...

PFIC Excess Distribution regime (Section 1291 Fund) – Form 8621 line by line 1

PFIC Excess Distribution regime (Section 1291 Fund) – Form 8621 line by line
We’ve see the basics of PFIC taxation in post Passive Foreign Investment Companies (PFIC) and Canadian mutual funds, although truth being told, it applies to PFICs anywhere, now let’s dig in – Let the brain damage begin The scenario is that John Doe (SSN: 000-00-0000). He bought share of the Safe Investment Inc, a PFIC on ...

Passive Foreign Investment Companies (PFIC) and Canadian mutual funds 2

Why are PFIC rules important for holders of Canadian mutual fund? Many American citizens living or working in Canada have invested in Canadian mutual funds – likewise, many Canadians who subsequently moved to the United States retained their Canadian mutual funds holdings. They likely are unaware of the PFIC rules. Consequently many American taxpayers holding ...

Scariest Tax Form? Skip It, And IRS Can Audit Forever

Hello everyone, I just came across the Forbes article Scariest Tax Form? Skip It, And IRS Can Audit Forever and while I agree with Robert Wood and form 5471 is indeed scary, I would like to nominate another form for this contest 😉 That is the form 8621, looks just as scary but with the added factor that ...

PFIC excess distribution – Small Interest Exceptions to filing form 8621 1

Temp. Treas. Reg. §1.1298-1T (c) (2) (i) provides an exception to the requirement to file an annual report under section 1298 (f) and regulations in certain shareholders in respect of the interest held in a PFIC in which the shareholder is subject to tax as provided for in section 1291 (ie without QEF or MTM ...