What is Form 8621?
IRS form for reporting ownership of Passive Foreign Investment Companies (PFICs) and making certain elections.
Definition
Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, must be filed by any US person who is a direct or indirect shareholder of a PFIC. A separate Form 8621 is required for each PFIC owned. The form allows shareholders to make QEF (Qualified Electing Fund) or mark-to-market elections, which can reduce the punitive default PFIC tax treatment.
Who Needs to Know This?
US persons who own shares in foreign mutual funds, foreign ETFs, or any foreign corporation meeting the PFIC definition, including US expats with investments in their country of residence.
Key Deadline
Filed with annual tax return for each PFIC owned
Potential Penalties
Failure to file may result in the statute of limitations remaining open indefinitely; punitive tax rates apply under default rules
Related Forms
Common Mistakes to Avoid
- 1Not filing a separate Form 8621 for each PFIC
- 2Missing the QEF or mark-to-market election deadline
- 3Not recognizing foreign mutual funds as PFICs
- 4Incorrectly calculating excess distributions
Related Terms
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