PFIC!
Moderator: Mark T Serbinski CA CPA
PFIC!
Hello! I just found out about this forum and I am hoping someone can help me as I have been talking to so many people and am just very confused with who to listen to at this point. I am a university student (Canadian RESIDENT and CITIZEN) as well as an American citizen (was pretty much born there then moved here). In November 2018, I purchased $2500 of Tangerine non-registered investment funds (like a mutual fund) which to my knowledge is a PFIC. Now, I received a disbursement/dividend of $15 in December 2018, but did not receive it in cash, it went straight into my funds. Would I still be filing form 8621, and if so, do I do a QEF election, do I have to file for every company that makes up the mutual fund, I'm just very confused. I've also never done U.S taxes before so I don't know if I have to fill a separate form for my non taxable income (e.g student loans/grants/bursaries/scholarships) and what how to offset my U.S taxes considering that I will not be paying taxes in Canada due to my tuition tax credits. Any advice is appreciated!
Re: PFIC!
Hello,
To my knowledge Tangerine investment funds won't provide you with the required PFIC annual information statement needed to make a QEF election. You can 1 of 2 things. Make a mark-to-market election, or stick with the default treatment.
The nice thing about tangerine investment funds is that they hold stocks and bonds directly and there are no sub-funds (this could change in the future but for now they hold investments directly). This means that you only need one form 8621 for each fund.
If you make a mark-to-market election, you have to file form 8621. Then you will report the $15 dividend as an ordinary dividend converted to US dollars. As well, you will need the value of the fund on Dec 31, 2018. Any increase in value over your original cost will be ordinary income. Any loss will be ignored.
If you choose not to make the election, and you have less than $25,000 in PFICs, you can choose not to file 8621. But you should read up on what happens if you later sell for a gain (in USD) or if the fund suddenly distributes a larger than normal dividend.
Hope this helps.
To my knowledge Tangerine investment funds won't provide you with the required PFIC annual information statement needed to make a QEF election. You can 1 of 2 things. Make a mark-to-market election, or stick with the default treatment.
The nice thing about tangerine investment funds is that they hold stocks and bonds directly and there are no sub-funds (this could change in the future but for now they hold investments directly). This means that you only need one form 8621 for each fund.
If you make a mark-to-market election, you have to file form 8621. Then you will report the $15 dividend as an ordinary dividend converted to US dollars. As well, you will need the value of the fund on Dec 31, 2018. Any increase in value over your original cost will be ordinary income. Any loss will be ignored.
If you choose not to make the election, and you have less than $25,000 in PFICs, you can choose not to file 8621. But you should read up on what happens if you later sell for a gain (in USD) or if the fund suddenly distributes a larger than normal dividend.
Hope this helps.
------------------------------
MGeorge is neither an accounting nor taxation professional.
MGeorge is neither an accounting nor taxation professional.
Re: PFIC!
MGeorge wrote:
> Hello,
>
> To my knowledge Tangerine investment funds won't provide you with the
> required PFIC annual information statement needed to make a QEF election.
> You can 1 of 2 things. Make a mark-to-market election, or stick with the
> default treatment.
> The nice thing about tangerine investment funds is that they hold stocks
> and bonds directly and there are no sub-funds (this could change in the
> future but for now they hold investments directly). This means that you
> only need one form 8621 for each fund.
> If you make a mark-to-market election, you have to file form 8621. Then
> you will report the $15 dividend as an ordinary dividend converted to US
> dollars. As well, you will need the value of the fund on Dec 31, 2018.
> Any increase in value over your original cost will be ordinary income. Any
> loss will be ignored.
>
> If you choose not to make the election, and you have less than $25,000 in
> PFICs, you can choose not to file 8621. But you should read up on what
> happens if you later sell for a gain (in USD) or if the fund suddenly
> distributes a larger than normal dividend.
>
> Hope this helps.
Does anyone know if Tangerine Investment Funds in a TFSA can use the market-to-market election?
> Hello,
>
> To my knowledge Tangerine investment funds won't provide you with the
> required PFIC annual information statement needed to make a QEF election.
> You can 1 of 2 things. Make a mark-to-market election, or stick with the
> default treatment.
> The nice thing about tangerine investment funds is that they hold stocks
> and bonds directly and there are no sub-funds (this could change in the
> future but for now they hold investments directly). This means that you
> only need one form 8621 for each fund.
> If you make a mark-to-market election, you have to file form 8621. Then
> you will report the $15 dividend as an ordinary dividend converted to US
> dollars. As well, you will need the value of the fund on Dec 31, 2018.
> Any increase in value over your original cost will be ordinary income. Any
> loss will be ignored.
>
> If you choose not to make the election, and you have less than $25,000 in
> PFICs, you can choose not to file 8621. But you should read up on what
> happens if you later sell for a gain (in USD) or if the fund suddenly
> distributes a larger than normal dividend.
>
> Hope this helps.
Does anyone know if Tangerine Investment Funds in a TFSA can use the market-to-market election?