Loading ...For Karl and others PFIC tax form 8621
From Karl:
“(I am having the hardest time getting someone to take my money to answer some of my tax questions on some of these companies, some detailed and specific to me!!! It’s like having one of those web sites so poorly designed that you can’t check out easily or having a store where no one is at the checkout counter except far worse. I really want to pay my taxes right and I want to pay someone to help me, but GRRRR!!!! Sorry, off topic again.)”
Question is are these investments passive foreign investments or capital investments??
OK nice tax form but.. how does one know if their stock is a PFIC ?
Thankfully I am Canadian.
This is likely the best reason to be thankful
🙂
I do not want to go into the matter since I am naive and seeking help. I do merely note that it can be complicated. For example, a little study reveals that a given company might be a PFIC for one person but not another depending on different persons’ histories of holding what when. One might also want advice on tax strategies. These are examples. The IRS itself estimates >20 hr of study is needed to know how to fill out the form. In some cases with complicated questions with a twist or two one might want an expert’s advice, possibly, even if one has put in the 20+ hours.
“a PFIC for one person but not another depending on different persons’ ” It can not be true. IRS provides definitions for each investments companies. The categories are depandent on how investments are register with IRS. Like Limited Liability passive companies.
You should not rely on me for PFIC information any more than you should rely on me for information on whether you can deduct a home office, on whether trading costs can be deducted etc. The material I presented may have been superseded or may be wrong. I cannot vouch for it. However according to multiple sources, such as the ones I cited, if Person A buys something when it is clearly a PFIC and it later becomes not a PFIC (no longer fits the PFIC criteria) it still is a PFIC for person A year after year even if it is no longer a PFIC. “Once a PFIC always a PFIC” is repeatedly stated in multiple references, meaning for a given person once that person has bought a PFIC it stays a PFIC until the person sells it no matter what. If Person B buys it after it does not fit PFIC criteria and is not a PFIC then it is not a PFIC by the rules. Thus in a given year for Person A it may be a PFIc and for Person B not a PFIC. I am not ruling out the possibility of other ways in which two different people might have a given company handled differently.
The matter may be worthwhile considering carefully rather than the opposite.
And it is perfectly possible that I misunderstand completely and that in the situation given I have it 100% wrong, that the phrase “Once a PFIC always a PFIC” means that for everyone a company that has started out as a non-earner with passive assets and no profits and in all respects is a PFIC and been that way for years and eventually becomes a clear-cut non-PFIC by most criteria nevertheless stays a PFIC for everyone, even new buyers. I don’t think so, but if you prefer looking at it that way, be my guest. Don’t hold me responsible for any tentative idea I offer.
Be my guest interpreting things however you’d like, but don’t hold me responsible, please, one way or the other. I offered some references to indicate that the topic is potentially both relevant and complicated. I do not understand the references well. I do not know how up to date or accurate they are. Feel free not to look at them and just have opinions, or to study in the greatest detail, but do not hold me responsible, please.
I don’t know and I don’t pretend to know. I am thoroughly able to make huge mistakes in this area.
Are Canadian Explorers Tax liabilitY ?
https://goldtadise.com/?p=449434#comments
Karl you should write disclaimers for a living.
NO one could ever hold you responsible for anything my friend
🙂
Thanks for bringing this to our attention.
From a distance it appears to be another example of government gone wild.
What kind of lunatics would ever bring this complexity and idiosity to the tax code.
Capital gains. Because we’re selling shares of an investment. We’re not getting distributions or dividends