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January 2017 International Tax Lunch: Foreign Mutual Funds and Form 8621 — the Default Rules in Depth

Foreign Mutual Funds and Form 8621 — the Default Rules in Depth

In this month’s tax lunch presentation, we will work through a real world scenario where a US person buys into a foreign mutual fund — which happens to be a PFIC — held in a foreign investment account. Over several years, he receives dividends (some of which are reinvested), some of his shares are redeemed to pay account fees, and finally, he sells all his shares in the PFIC.

We will cover the real calculations in detail, including running basis as the share holdings change over time, excess distributions, tax, and interest. We will show where to put all the numbers from your calculations on the tax forms. Lastly, we will discuss the tax results, including how losses are taxed.

Who: Debra Rudd