IRS 8621 2004 free printable template

1c Cat. No. 64174H 3d 3e 4c Rev. 12-2004 Page Form 8621 Rev. 12-2004 Gain or Loss From Mark-to-Market Election See page 5 of instructions.

How to fill out IRS 8621

How to fill out IRS 8621

1. Obtain IRS Form 8621 from the IRS website or a tax professional.
2. Fill in your name, address, and taxpayer identification number at the top of the form.
3. Specify the type of reporting entity (e.g., individual, corporation) in the appropriate section.
4. Complete Part I by providing details of the Passive Foreign Investment Company (PFIC) in which you are a shareholder.
5. In Part II, report your income from the PFIC as categorized into ordinary income, capital gains, and excess distributions.
6. Fill out any relevant sections of Part III to report excess distributions and gains.
7. If applicable, complete Part IV for QEF (Qualified Electing Fund) election or mark as not applicable.
8. Review the form for accuracy and completeness.
9. Sign and date the form before submitting it along with your tax return.

Who needs IRS 8621?

1. U.S. taxpayers who have direct or indirect ownership in Passive Foreign Investment Companies (PFICs).
2. Taxpayers who have received excess distributions from a PFIC.
3. U.S. persons who made a QEF election regarding their investment in a PFIC.

People Also Ask about

What are examples of PFIC?

Examples of securities that are classified as PFICs are Canadian mutual funds, Canadian pooled funds, Canadian Exchange Traded Funds (ETFs) and many Canadian income trusts or real estate investment trusts (REITs).

Who needs PFIC reporting?

PFICs and Tax Strategies U.S. investors who own shares of a PFIC must file IRS Form 8621. This form is used to report actual distributions and gains, along with income and increases in QEF elections. The tax form 8621 is a lengthy, complicated form that the IRS itself estimates may take more than 40 hours to fill out.

What qualifies as a PFIC?

The IRS defines a passive foreign investment company (PFIC) as a non-U.S. entity that either earns 75% or more of its gross income from non-business operational activities (the income test); or, if it least 50% of its assets are held for generating passive income (the asset test).

Who needs to file PFIC?

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.

Is there a threshold for filing form 8621?

Threshold for Reporting PFIC The person who is single or married filing separate has to file form 8621 in any year that their total number of PFICs exceed $25,000.

What is the purpose of IRS form 8621?

A U.S. person can attach the Form 8621 to an amended return for the tax year of the U.S. person to which the election relates if the U.S. person can demonstrate that the reason for not filing the form with its original return was due to reasonable cause.

Is there a penalty for not filing form 8621?

There is actually no penalty for not filing this form when you are supposed to. However, the statute of limitations for assessing penalties is suspended until you do file the form, if required. That means your entire return remains subject to audit until three years after you file the required Form 8621.

How do you determine if an investment is a PFIC?

Under the income test, a foreign corporation is a PFIC if 75% or more of its gross income is passive income. Under the asset test, a foreign corporation is a PFIC if 50% or more of the average value of its assets consists of assets that would produce passive income.

What is form 8621 for?

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 ETFs considered PFICs?

Most PFICs are simply “pooled investments” incorporated outside of the United States. These include foreign mutual funds, exchange-traded funds (ETFs), closed-end funds, hedge funds, insurance products and investments held in some non-U.S. pension plans.

Is there a penalty for not filing 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.

Do I have to file 8621 every year?

Most US citizens who are shareholders in a PFIC are required to file Form 8621 every year. Using Form 8621, shareholders can report certain types of PFIC income.

Do I need to file form 8621 every year?

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. Make an election reportable on Form 8621.

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What is IRS 8621?

IRS Form 8621 is the Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, which is used by U.S. shareholders to report their interest in a Passive Foreign Investment Company (PFIC) or Qualified Electing Fund (QEF).

Who is required to file IRS 8621?

U.S. shareholders of a Passive Foreign Investment Company (PFIC) or those who have made a Qualified Electing Fund (QEF) election are required to file IRS Form 8621 if they exceed certain thresholds of ownership or income.

How to fill out IRS 8621?

To fill out IRS Form 8621, taxpayers must provide their personal information, details about the PFIC or QEF, including income, distributions, and any elections made, and report specific financial data as required by the form instructions.

What is the purpose of IRS 8621?

The purpose of IRS Form 8621 is to comply with U.S. tax laws regarding foreign investment by U.S. taxpayers, enabling the IRS to track income, distributions, and compliance related to PFICs and QEFs.

What information must be reported on IRS 8621?

Information that must be reported on IRS Form 8621 includes the shareholder's details, the PFIC or QEF's information, income, gains, losses, distributions received, and any elections made regarding taxation.