Foreign Mutual Funds

[upcomingcpa19]

I have foreign mutual funds, have been reporting them on FBAR every year from the day of holding. Some of the mutual funds are invested in equity, some are in bonds. The equity funds’ market value has gone down from the cost basis. The bonds based funds value has gone up, by some extent. Should I be reporting these funds on Form 8621? I can’t take QEF. My understanding is that I can’t take MTM because its not the first year of holding and in aggregate, I am at a loss or do I need to report equity and bonds based funds separately? When will I use excess distributions? I haven’t received any distributions and I am looking to sell all the funds in next year.

 

[davew9128]

Yes, the foreign funds are PFICS. You would do well to find a tax specialist who deals with them, as the rules are extremely complex, and quite honestly PFIC reporting is a niche even amongst the international tax community.

 

[upcomingcpa19]

True, thanks. I tried calling up IRS, however, it seems that due to tax season, they are not attending any tax questions. The automated mail says to refer the irs.gov

 

[davew9128]

True, thanks. I tried calling up IRS, however, it seems that due to tax season, they are not attending any tax questions. The automated mail says to refer the irs.gov

Kind of missing the point. The definition of what constitutes a PFIC is complex, calculating PFIC income worse, and navigating the elections for many situations frustrating beyond belief. If you aren't skilled here, find someone who is.