Instructions For Form 8621 December 2011 printable pdf download

Instructions for Form 8621

Department of the Treasury

Internal Revenue Service

(Rev. December 2011)

Information Return by a Shareholder of a Passive Foreign Investment Company or

Qualified Electing Fund

•

When and Where To File

Is making an election reportable in

Section references are to the Internal

Part I of the form.

Revenue Code unless otherwise noted.

Attach Form 8621 to the shareholder’s

General Instructions

tax return (or, if applicable, partnership

A separate Form 8621 must be filed

or exempt organization return) and file

for each PFIC in which stock is held.

both by the due date, including

See Chain of ownership below for

What’s New

extensions, of the return at the Internal

specific filing requirements.

•

Revenue Service Center where the tax

New section 1298(f) was added by

Indirect shareholder. Generally, a

return is required to be filed.

section 521 of the Hiring Incentives to

U.S. person is an indirect shareholder

Restore Employment Act of 2010.

If you are not required to file an

of a PFIC if it is:

However, Notice 2011-55, 2011-29

income tax return or other return for the

1. A direct or indirect owner of a

I.R.B. 53, suspends the section 1298(f)

tax year, file Form 8621 directly with

pass-through entity that is a direct or

reporting requirement for tax years

the Internal Revenue Service Center,

indirect shareholder of a PFIC,

beginning after March 18, 2010, for

Ogden, UT 84201-0201.

2. A shareholder of a PFIC that is a

PFIC shareholders that are not

shareholder of another PFIC, or

otherwise required to file Form 8621 as

Definitions and Special

3. A 50%-or-more shareholder of a

provided in the Who Must File section

foreign corporation that is not a PFIC

Rules

below. The suspension of the section

and that directly or indirectly owns stock

1298(f) reporting requirement will

of a PFIC.

remain in effect pending the release of

Passive Foreign Investment

a subsequent revision of Form 8621,

Company (PFIC)

Interest holder of pass-through

modified to reflect the requirements of

entities. The following interest holders

A foreign corporation is a PFIC if it

section 1298(f), as set forth in guidance

must file Form 8621 under the

meets either the income or asset test

to be included in future regulations.

circumstances described above:

described below.

•

Elections G and H were added to

1. A U.S. person that is an interest

1. Income test. 75% or more of the

Part I of the form to provide a method

holder of a foreign pass-through entity

corporation’s gross income for its

for shareholders to make timely

that is a direct or indirect shareholder of

taxable year is passive income (as

deemed dividend elections with respect

a PFIC,

defined in section 1297(b)).

to a section 1297(e) PFIC (as defined

2. A U.S. person that is considered

2. Asset test. At least 50% of the

in Regulations section 1.1291-9(j)(2)(v))

(under sections 671 through 679) the

average percentage of assets

(election G) and with respect to a

shareholder of PFIC stock held in trust,

(determined under section 1297(e))

former PFIC that was also a controlled

and

held by the foreign corporation during

foreign corporation (election H). See

3. A U.S. partnership, S corporation,

the taxable year are assets that

the instructions for these new elections

trust (other than a trust that is subject to

produce passive income or that are

on page 6 for additional information.

sections 671 through 679 for the PFIC

held for the production of passive

•

Lines 8 through 9c were added to

stock), or estate that is a direct or

income.

Part III of the form for sales and other

indirect shareholder of a PFIC.

dispositions of section 1296 stock. See

Basis for measuring assets. When

Lines 8 through 9c on page 8 for

determining PFIC status using the

Note. U.S. persons that are interest

additional information.

asset test, a foreign corporation may

holders of pass-through entities

•

The IRS has created a page on

use adjusted basis if:

described in 3 above must file Form

IRS.gov for information about Form

8621 if the pass-through entity fails to

1. The corporation is not publicly

8621 and its instructions, at

file such form or the U.S. person is

traded for the taxable year and

gov/form8621. Information about any

required to recognize any income under

2. The corporation is (a) a controlled

future developments affecting Form

section 1291.

foreign corporation within the meaning

8621 (such as legislation enacted after

of section 957 (CFC) or (b) makes an

we release it) will be posted on that

Chain of ownership. If the

election to use adjusted basis.

page.

shareholder owns one PFIC and

through that PFIC owns one or more

Publicly traded corporations must

Who Must File

other PFICs, the shareholder must

use fair market value when determining

either:

PFIC status using the asset test.

Generally, a U.S. person that is a direct

1. File a Form 8621 for each PFIC

or indirect shareholder of a PFIC must

Look-thru rule. When determining if a

in the chain or

file Form 8621 for each tax year in

foreign corporation that owns at least

2. Complete Form 8621 for the first

which that U.S. person:

25% (by value) of another corporation

•

PFIC and, in an attachment, provide

Recognizes gain on a direct or

is a PFIC, the foreign corporation is

the information required on Form 8621

indirect disposition of PFIC stock,

treated as if it held a proportionate

for each of the other PFICs in the

•

Receives certain direct or indirect

share of the assets and received

chain.

distributions from a PFIC, or

directly its proportionate share of the

Oct 19, 2011

Cat. No. 10784P

Instructions For Form 8621 December 2011

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