US/Canadian Citizen, Canadian Resident Investing

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ethanpurdy
Posts: 24
Joined: Tue Apr 28, 2015 10:29 pm

US/Canadian Citizen, Canadian Resident Investing

Post by ethanpurdy »

I have a couple of questions that I'd like to discuss regarding investing options for a US/Canadian Citizen in Canada.

1. At the end of 2015 I made small purchases of a number of Canadian listed ETFs that are classified as PFICs. At the time I wasn't aware of the PFIC rules and form 8621. I became aware of it after the purchases were made. All of my purchases were small (totaling <$5000 CAD) and in 2015 I received no distributions. I did not file the 8621 as it was not required based on the exemptions. In January I received distributions for these investments. Having become aware of the PFIC issue I sold these investments all at a loss (to avoid capital gains triggering 8621 filing requirement).

Because I received the distribution am I required to file 8621 even though the investments were small and I did not have a capital gain? To my knowledge the distributions in 2016 were not 25% greater than those in 2015. Some of the investments were literally $100 and filing an 8621 for each one would be a significant cost.


2. iShares and Vanguard are providing PFIC information forms for their ETFs as well as some mutual funds (Fidelity, Franklin Templeton, and others). Given this, does holding Canadian listed ETFs make sense now that the QEF Election is possible? If I go this route what exactly would I need to track for 8621: cost basis in CAD, USD/CAD annual exchange rate, distributions, details provided on the QEF Election form, anything else?

Thanks very much!!
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