Tripping up on some PFIC stuff - QEF Election

nabstar · Post by **nabstar** » Sat Apr 08, 2017 11:54 pm

Hey guys,

Hopefully this is not a question asked by other people.

Now there is a PFIC its year end is April 30th, 2016. The fund was bought in March 2016 for $10,000 and sold in July 31, 2016 for say $20,000 .

The PFIC statement says its portion of the capital gain is say $100 for year ended April 30, 2016. So using the QEF Election, you report that income, I guess in the 2016 personal return. This increases the cost basis to $10,100. Now heres where I am getting tripped up. I would asusme you report the capital gain in 2016= $20,000 minus cost $10,100 = $9,900 gain in the 2016 return. But what happens next year. You still have to report the accrued income from May 1st to July 31st. This would then increase the basis, but that makes no sense since the stock is gone?

MGeorge · Post by **MGeorge** » Tue Apr 18, 2017 11:08 am

Hi nabstar,

I have the same question. You'll have to report the May - July income on next year's return. The only 2 options I can think of are:
1. amend your 2016 return with the new basis adjustment, or
2. simply add an additional loss (or gain) on schedule D for the adjustment on your 2017 return.

The instructions are silent on this part as far as I know.

Cheers!