Instructions For Form 8621 December 2011 Page 5
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10How To Make the Election
Attachments. The shareholder must
determined under section 1297(d).
attach a statement to Form 8621 that
However see Form 8621-A (and
To make this election:
demonstrates the calculation of its pro
Regulations sections 1.1297-3(e) and
1. Check box D in Part I and
rata share of the post-1986 earnings
1.1298-3(e)) if the 3-year period has
2. Complete lines 3a through 4c of
and profits of the PFIC that are treated
expired.
Part II.
as distributed to the shareholder on the
How To Make the Election
qualification date. The post-1986
For more information on making
To make this election:
earnings and profits may be reduced
Election D, see Temporary Regulations
(but not below zero) by the amount that
1. Check box E in Part I and
section 1.1294-1T.
the shareholder satisfactorily
2. Enter the gain or loss on line 10f
See Part V for annual reporting
demonstrates was previously included
of Part IV. If a gain, complete the rest of
requirements for outstanding section
in its income or in the income of
Part IV.
1294 elections.
another U.S. person. The shareholder
demonstrates this by including in the
E. Deemed Sale Election with
F. Election To
statement mentioned above the
Respect to a Former PFIC or
Mark-to-Market PFIC Stock
following information:
“Section 1297(e) PFIC”
•
(Section 1296 Election)
The name, address, and identifying
number of the U.S. person and the
Who May Make the Election
Who May Make the Election
amount that was included in income;
•
The tax year in which the amount
This is a deemed sale election under
Election F may be made by:
•
was previously included in income;
section 1298(b)(1) and Regulations
A U.S. person who owns (or is
•
section 1.1297-3(b) or 1.1298-3(b). This
The provision of law under which the
treated as owning) “marketable stock”
election may be made by:
amount was previously included in
(defined on page 2) in a PFIC at the
•
A U.S. person that is a shareholder
income;
close of such person’s tax year or
of a foreign corporation that no longer
•
•
A RIC that meets the requirements of
A description of the transaction in
qualifies as a PFIC under either the
section 1296(e)(2).
which the shareholder acquired the
income or asset test of section 1297(a)
stock of the PFIC from the other U.S.
For more information, see section
or
person; and
1296 and Regulations section 1.1296-1.
•
A U.S. shareholder (as defined in
•
The provision of law under which the
See sections 1296(f) and (g) and
section 951(b)) that owns stock in a
shareholder’s holding period includes
Regulations sections 1.1296-1(e) and
foreign corporation that is a CFC and is
the holding period of the other U.S.
(h)(1)(ii) for information regarding stock
not treated as a PFIC with respect to
person.
owned through certain foreign entities.
the U.S. shareholder under section
1297(d).
When To Make the Election
For more information on making
Such persons may elect to treat the
Election C, see Regulations section
This election must be made on or
stock of the foreign corporation as sold
1.1291-9.
before the due date (including
on the last day of the last tax year of
extensions) of the U.S. person’s income
the foreign corporation in which it was
D. Election To Extend Time
tax return for the tax year in which the
treated as a PFIC (termination date) for
stock is marked to market. A section
for Payment of Tax
its fair market value on that date.
1296 election by a CFC is made by its
Special Rules
controlling shareholders. For more
Who May Make the Election
information, see Regulations section
•
The gain from the deemed sale is
A shareholder of a QEF may make
1.1296-1(h)(1)(ii). Once made, the
taxed as an excess distribution.
Election D to extend the time for
election applies to all subsequent tax
•
The basis in the stock is increased by
payment of the tax on its share of the
years unless the election is revoked or
the amount of the excess distribution
undistributed earnings of the fund for
terminated pursuant to Regulations
taxed to the shareholder making
the current tax year. If a U.S.
section 1.1296-1(h)(3).
Election E.
partnership is a shareholder of a QEF,
•
The new holding period of the stock
How To Make the Election
the election is made at the partner
begins on the date after the deemed
level.
To make the election:
sale.
•
1. Check box F in Part I,
Election E may be made for stock on
Special Rules
2. Complete Part III to report the
which there would be a loss, but the
•
If this election is made, interest will
gain or loss, and
loss is not recognized.
be imposed on the amount of the
3. Complete Part IV if the tax and
For more information on making this
deferred tax.
interest rules of section 1291 (explained
election, see Regulations sections
•
The election cannot be made for any
in the Part IV instructions, which begin
1.1297-3(b) and 1.1298-3(b).
earnings on shares disposed of during
on page 8) apply.
When To Make the Election
the tax year or for a tax year that any
portion of the shareholder’s pro rata
Coordination of Election F with
This election must be made by the due
share of the fund’s earnings is included
section 1291. If Election F is made for
date of the shareholder’s original tax
in income under section 951 (relating to
any tax year, then, except as provided
return (or by filing an amended return
CFCs).
in Coordination rules for first year of
within 3 years of the due date, as
election below, do not complete Part IV
extended under section 6081, of the
When To Make the Election
of Form 8621 with respect to any stock
original return) for the tax year that
for which that election is made.
Generally, this election must be made
includes, as appropriate, either the last
Coordination rules for first year of
by the due date, including extensions,
day of the last year of the foreign
election. See section 1296(j) and
of the shareholder’s tax return for the
corporation during which it qualified as
tax year for which the shareholder
a PFIC or the first day on which the
Regulations section 1.1296-1(i) for
reports the income related to the
qualified portion of the shareholder’s
coordination rules that apply for the first
deferred tax.
holding period in the PFIC begins, as
year that election F is made.
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