IRS 8621 2018 free printable template

This form is used by shareholders of Passive Foreign Investment Companies (PFICs) or Qualified Electing Funds (QEFs) to report information including financial details and elections related to their

How to fill out IRS 8621

How to fill out IRS 8621

1. Gather all relevant information about your foreign corporation or foreign partnership.
2. Determine your ownership interest, including the number of shares you own and their value.
3. Complete Part I by providing information about the foreign entity, including its name, address, and Employer Identification Number (EIN).
4. Fill out Part II where you need to report your income distributions and deductions related to the foreign corporation or partnership.
5. Complete Part III detailing the amounts of any income and expenses that need to be reported.
6. Complete Part IV if you held certain types of interests in the foreign corporation or partnership.
7. Review all entries for accuracy, ensuring that all amounts are correctly calculated.
8. Sign and date the form before submitting it according to the filing requirements.

Who needs IRS 8621?

1. U.S. taxpayers who own shares in a foreign corporation or interests in a foreign partnership.
2. Individuals with a direct or indirect ownership interest in a passive foreign investment company (PFIC).
3. Taxpayers who have received distributions or have a reportable event related to a foreign entity.

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.

For pdfFiller’s FAQs

How do I edit IRS 8621 in Chrome?

Download and install the pdfFiller Google Chrome Extension to your browser to edit, fill out, and eSign your IRS 8621, which you can open in the editor with a single click from a Google search page. Fillable documents may be executed from any internet-connected device without leaving Chrome.

How can I fill out IRS 8621 on an iOS device?

In order to fill out documents on your iOS device, install the pdfFiller app. Create an account or log in to an existing one if you have a subscription to the service. Once the registration process is complete, upload your IRS 8621. You now can take advantage of pdfFiller's advanced functionalities: adding fillable fields and eSigning documents, and accessing them from any device, wherever you are.

How do I fill out IRS 8621 on an Android device?

Use the pdfFiller mobile app to complete your IRS 8621 on an Android device. The application makes it possible to perform all needed document management manipulations, like adding, editing, and removing text, signing, annotating, and more. All you need is your smartphone and an internet connection.

What is IRS 8621?

IRS Form 8621 is used by U.S. persons to report information regarding their interest in a Passive Foreign Investment Company (PFIC) and to make certain elections related to PFICs.

Who is required to file IRS 8621?

U.S. persons who have an interest in a PFIC, which includes shareholders of foreign corporations that meet the PFIC criteria, are required to file IRS Form 8621.

How to fill out IRS 8621?

To fill out IRS Form 8621, provide details about the PFIC, including the name of the corporation, income, and tax liability information, as well as any elections being made. Follow the specific instructions provided by the IRS for each section.

What is the purpose of IRS 8621?

The purpose of IRS Form 8621 is to ensure compliance with U.S. tax laws regarding investments in PFICs, allowing the IRS to track income from these foreign investments and apply appropriate taxation.

What information must be reported on IRS 8621?

IRS Form 8621 requires the reporting of information such as the name and address of the PFIC, the type and amount of shares held, income from the PFIC, and any distributions received, as well as elections made under specific sections of the tax code.