Form 8621 · PFIC
Form 8621 (PFIC): what it is, who files, and how to complete it
The IRS information return for passive foreign investment companies — who has to file, the $25k/$50k exception, and the three tax regimes (§1291, QEF, mark-to-market).
Form 8621 is the IRS information return a U.S. person files for a passive foreign investment company (PFIC) — in practice, most non-U.S. mutual funds and ETFs. If you hold foreign funds, this is usually the form mainstream tax software leaves out.
Who has to file Form 8621?
Broadly, a U.S. person who is a PFIC shareholder and receives certain distributions, disposes of PFIC stock, makes or reports a QEF or mark-to-market election, or is otherwise required to file the annual report under IRC §1298(f). The IRS Form 8621 instructions set out the full list.
The three tax regimes
- §1291 (default) — excess distributions and gains are taxed as ordinary income at the top rate, thrown back across your holding period, plus an interest charge.
- QEF (§1295) — you include your pro-rata share of the fund's ordinary earnings and net capital gain each year.
- Mark-to-market (§1296) — you mark the stock to fair value annually, as ordinary income or loss.
One Form 8621 per PFIC, every year you hold it. Work through each part below.
Work through your Form 8621
Build the default §1291 worksheet on your own numbers. Atamatax is tax-preparation software, not a CPA firm, and this is not individualised tax advice.
Atamatax provides tax preparation support and educational resources. This website does not constitute legal or tax advice.