Fillable Form 8621

What is Form 8621?

Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, is an Internal Revenue Service (IRS) form used to report ownership in passive foreign investment companies.

It is not mandatory to file this form unless there is a distribution of income from a passive foreign investment company (PFICs) in which a U.S. person is a shareholder or a disposition of the shares of a PFIC by gift, death, and most types of otherwise tax free exchanges or redemptions. The form should be filed with the tax return of the U.S. taxpayer for each separate PFIC in which the taxpayer is a shareholder.

Who needs to use Form 8621?

A U.S. person that is a direct or indirect shareholder of a passive foreign investment company (PFIC) must file the 8621 form if they:

• Receive certain direct or indirect distributions from a PFIC.
• Recognize a gain on a direct or indirect disposition of PFIC stock.
• Are reporting information with respect to a QEF or section 1296 mark-to-market election.
• Are making an election reportable in Part II of the form.
• Are required to file an annual report pursuant to section 1298(f).

How to fill out Form 8621?

IRS Form 8621 is a very simple, if long, form to fill out. Make sure to download it in the PDF format to ensure that its format and all information entered remain intact regardless of how it is opened or submitted. It may also be beneficial to have the relevant documents prepared to make sure that all information entered is updated and correct.

If more details on particular steps and items on the form are required, you may consult the instructions for Form 8621 on the IRS website.

Name of Shareholder

Enter the full legal name of the shareholder.

Identifying Number

Enter the identifying number assigned to the shareholder.

Number, Street, and Room or Suite Number

Enter the shareholder’s number, street, and room or suite number. If the local post office does not deliver to the given street address, enter their P.O. box number.

City or Town, State, and ZIP code or Country

Enter the shareholder’s city or town, state, and ZIP code or country.

Shareholder Tax Year

Enter the calendar year and the beginning and end of the tax year that this form is being filed for.

Type of Shareholder

Check the appropriate box that corresponds to the type of shareholder filing this form. You may choose from the following:

• Individual
• Corporation
• Partnership
• S Corporation
• Nongrantor Trust
• Estate

Then check the box provided if any excepted specified foreign financial assets are reported on this form.

Qualifying Insurance Corporation Election

Check the box provided if the shareholder elects to treat such stock as the stock of a Qualifying Insurance Corporation under the alternative facts and circumstances test within the meaning of section 1297(f)(2).

Name of Foreign Corporation, Passive Foreign Investment Company (PFIC), or Qualified Electing Fund (QEF)

Enter the name of the foreign corporation, PFIC, or QEF.

Address

Enter the number, street, city or town, and country of the foreign corporation, PFIC, or QEF.

Employer Identification Number

Enter the Employer Identification Number (EIN) of the foreign corporation, PFIC, or QEF, if any.

Reference ID Number

Enter the reference ID number of the foreign corporation, PFIC, or QEF.

Tax Year and Calendar Year

Enter the calendar year and the beginning and end of the tax year of the foreign corporation, PFIC, or QEF that this form is being filed for.

Part I - Summary of Annual Information

Line 1

Enter a short description of each class of shares held by the shareholder. Check the box provided if the shares are jointly owned with a spouse.

Line 2

Enter the date that shares were acquired within this year, if applicable.

Line 3

Enter the number of shares held at the end of the tax year.

Line 4

Check the box that indicates the value of the shares held at the end of the tax year. You may choose from the following:

• $0-50,000
• $50,001-100,000
• $100,001-150,000
• $150,001-200,000
• Greater than $200,000 (enter the value in the space provided)

Line 5

Check all boxes that apply to the type of PFIC and amount of any excess distribution or gain treated as an excess distribution under section 1291, inclusion under section 1293, and inclusion or deduction under section 1296. You may choose from:

• Section 1291 (enter the value in the space provided)
• Section 1293 (Qualified Electing Fund) (enter the value in the space provided)
• Section 1296 (Mark to Market) (enter the value in the space provided)

Part II - Elections

Check the appropriate box that indicates the election being made through or alongside this form. You may choose from:

• Election to Treat the PFIC as a QEF
• Election to Extend Time for Payment of Tax
• Election to Mark-to-Market PFIC Stock
• Deemed Sale Election
• Deemed Dividend Election
• Election to Recognize Gain on Deemed Sale of PFIC
• Deemed Dividend Election with Respect to a Section 1297(e) PFIC
• Deemed Dividend Election with Respect to a Former PFIC

Part III - Income from a QEF

All QEF shareholders must complete Lines 6a through 7c. If you are making Election B, you must also complete Lines 8a through 9c.

Line 6a

Enter your pro rata share of the ordinary earnings of the QEF

Line 6b

Enter the portion of line 6a that is included in income under section 951 or that may be excluded under section 1293(g)

Line 6c

Subtract line 6b from line 6a and enter the difference here and on your tax return as ordinary income.

Line 7a

Enter your pro rata share of the total net capital gain of the QEF

Line 7b

Enter the portion of line 7a that is included in income under section 951 or that may be excluded under section 1293(g)

Line 7c

Subtract line 7b from line 7a and enter the difference here and in Part II of the Schedule D used for your income tax return.

Complete lines 8 and 9 only if you are making a section 1294 election (Election B) for the current tax year.

Line 8a

Add lines 6c and 7c and enter the sum.

Line 8b

Enter the total amount of cash and the fair market value of other property distributed or deemed distributed to you during the tax year of the QEF.

Line 8c

Enter the portion of line 8a not already included in line 8b that is attributable to shares in the QEF that you disposed of, pledged, or otherwise transferred during the tax year

Line 8d

Add Lines 8b and 8c and enter the sum.

Line 8e

Subtract line 8d from line 8a, and enter the difference. If the difference is zero or less, enter the amount in brackets. If the difference is greater than zero, and no portion of line 6a or 7a is includible in income under section 951, you may make Election B with respect to the amount on line 8e.

Line 9a

Enter the total tax for the tax year.

Line 9b

Enter the total tax for the tax year determined without regard to the amount entered on line 8e

Line 9c

Subtract Line 9b from Line 9a and enter the difference.

Part IV - Gain or Loss From Mark-To-Market Election

Line 10a

Enter the fair market value of your PFIC stock at the end of the tax year

Line 10b

Enter your adjusted basis in the stock at the end of the tax year

Line 10c

Subtract Line 10b from Line 10a and enter the difference. If the difference is a gain (positive), do not complete lines 11 and 12 and include this amount on your tax return as ordinary income. If the difference is a loss (negative), proceed to Line 11.

Line 11

Enter any unreversed inclusions as defined in section 1296(d).

Line 12

Enter the loss from line 10c, but only to the extent of unreversed inclusions on line 11. Include this amount on your tax return as ordinary loss.

Line 13

If you sold or otherwise disposed of any section 1296 stock during the tax year, enter the relevant information in Lines 13a-13c.

Line 13a

Enter the fair market value of the stock on the date of sale or disposition

Line 13b

Enter the adjusted basis of the stock on the date of sale or disposition

Line 13c

Subtract line 13b from line 13a and enter the difference. If the difference is a gain (positive), do not complete line 14. Include this amount on your tax return as ordinary income. If the difference is a loss (negative), proceed to Line 14.

Line 14a

Enter any unreserved inclusions as defined in section 1296(d).

Line 14b

Enter the loss from line 13c, but only to the extent of unreversed inclusions on line 14a. Include this amount as an ordinary loss on your tax return. If the loss on line 13c is greater than the amount on line 14a, complete line 14c.

Line 14c

Enter the difference between Line 13c and Line 14a. Include this amount on your tax return according to the rules generally applicable for losses provided elsewhere in the Code and regulations

Part V - Distributions From and Distributions

Line 15a

Enter the total distributions from section 1291 found during the current tax year with respect to the applicable stock.

Line 15b

Enter the total distributions made by the fund with respect to the applicable stock for each of the 3 years preceding the current tax year.

Line 15c

Divide Line 15b by 30% (0.30) and enter the quotient.

Line 15d

Multiply Line 15c by 125% (1.25) and enter the product.

Line 15e

Subtract Line 15d from Line 15a and enter the difference. If the difference is zero or less, and you did not dispose of stock during the last tax year, do not complete the rest of Part V.

Line 15f

Enter the gain or loss from the disposition of a stock of a section 1291 fund or former section 1291 fund. If the amount entered is a gain, proceed to Line 16. If the amount entered is a loss, enter it in brackets and do not fill out Line 16.

Line 16a

If there is a positive amount on line 15e or 15f (or both), attach a statement for each excess distribution and disposition. Show your holding period for each share of stock or block of shares held and allocate the excess distribution or gain to each day in your holding period.

Line 16b

Enter the total of the amounts determined in line 16a that are allocable to the current tax year and tax years before the foreign corporation became a PFIC (pre-PFIC years) here and on your income tax return as other income.

Line 16c

Enter the aggregate increases in tax (before credits) for each tax year in your holding period (other than the current tax year and pre-PFIC years).

Line 16d

Enter the amount of foreign tax credit.

Line 16e

Subtract Line 16d from Line 16c and enter the difference here and on your income tax return as additional tax.

Line 16f

Enter the aggregate amount of interest.

Part VI - Status of Prior Year Section 1294 Elections and Termination of Section 1294 Elections

Complete a separate column for each outstanding election.

Complete Lines 17 to 20 to report the status of outstanding prior year section 1294 elections.

Line 17

Enter the tax year of the outstanding election.

Line 18

Enter the undistributed earnings to which the election relates.

Line 19

Enter the amount of deferred tax.

Line 20

Enter the amount of interest accrued on the deferred tax as indicated on Line 19 as of the filing date of this form.

Complete lines 21 through 24 only if a section 1294 election is terminated in the current year.

Line 21

Enter the event that terminated the election.

Line 22

Enter the total earnings distributed or deemed to have been distributed during the tax year.

Line 23

Enter the amount of deferred tax due with this return.

Line 24

Enter the amount accrued interest due with this form.

Complete lines 25 and 26 only if there is a partial termination of a section 1294 election in the current tax year.

Line 25

Subtract Line 23 from Line 19 and enter the difference.

Line 26

Subtract Line 24 from Line 20 and enter the difference.

Tips when filling out Form 8621

Form 8621 IRS is a simple form to fill out, but its length means that it is doubly important to double-check the information being entered to ensure that everything is correct and updated. This will help to avoid any legal issues from providing the wrong information to the IRS.

Keep the form in a safe and secure area. Form 8621 contains some sensitive information, most notably your name and tax information, so it is important that it be kept in a safe area and submitted through trustworthy means to avoid any issues such as identity theft or misfiling forms.

Practice good contract management. Keep a copy of the accomplished form in a safe area. This will be useful for possible future legal purposes or as a backup in the event that something happens to the original copy.