Difference between distribution and disposition, 8621

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mcaps
Posts: 27
Joined: Fri Dec 05, 2014 11:02 pm
Location: USA

Difference between distribution and disposition, 8621

Post by mcaps »

Reading through 8621 instructions and ran into the following. What is the difference between these distribution and disposition when used as follows.

1.
Receives certain direct or indirect
distributions from a PFIC,
2.
Recognizes gain on a direct or
indirect disposition of PFIC stock

thank you.
JGCA
Posts: 754
Joined: Thu Nov 18, 2010 3:05 pm
Location: Montreal, QC Canada

Post by JGCA »

These are rules for shareholders owning shares in passive foreign investment company holdings. As a shareholder you may own these shares directly in your name or through say a holding company that you also own ( this is indirect since its owned by an other entity that you own) as long as there is a 10% ownership either directky or indirectly you are required to file the 8621. Ownership through a trust will also be considered an indirect holding if the trust is discretionary.
JG
nelsona
Posts: 18311
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

I think he is asking NOT about direct/indirect, but rather disposition and distribution.

Distribution is "dividends" that can either be cap gains, dividends, or interst, distributed periodically to the fund (internal gains if you will),
A disposition would be an outright sale of the investment.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
mcaps
Posts: 27
Joined: Fri Dec 05, 2014 11:02 pm
Location: USA

Post by mcaps »

nelsona nailed it. So number 2 applies to my situation since I outright disposed of the investment.

thank you.
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