Filling form 8621 for two TFSA investments

[misaki]

Hello all,

I'm a Canadian citizen that's living in the US and doing my US taxes as a resident alien for the first time. I just found this forum and thought it can help me with form 8621.

I have two investments that I think require form 8621:

1. Tangerine TFSA investment fund:
◇ ~10k cash. 1 dividend at end of 2019.
◇ Increase in market value when comparing Dec 31 to Jan 1
◇ Did not sell in 2019
2. TFSA mutual fund trust (real estate investment company called Greybook)
◇ ~50k value for all of 2019
◇ No distributions or dividends. Value was the same for the entire year.

My questions are:

1. For my Tangerine fund, what's the best election to make? I heard there are three options. I don't think I can do QEF since Tangerine doesn't provide a PFIC statement.

2. Are there any resources with step-by-step instructions to fill out 8621? I find the IRS guide to be very confusing. I found some guides for QEF but nothing for the other options. I do my own taxes (Canadian and US) every year, but I'm finding US taxes to be a lot more confusing.

3. For my TFSA mutual fund trust, is form 8621 required? There were no distributions or changes in value for the entire year. Also the fund is in a real estate project. See here for more info: https://realty.greybrook.com/

[misaki]

Can anyone help with this?

[CdnAmerican]

Probably others can help more than I for #1, but I think that for #2, you could compute the change in value in US$ (which may be quite different than in the investment's currency), and then count it as income under mark-to-market. That's what I do with my Cdn mutual funds, noting that it is a pain as you have to file a separate 8621 for each mutual fund owned. Hope that helps!

[misaki]

CdnAmerican wrote:
> Probably others can help more than I for #1, but I think that for #2, you
> could compute the change in value in US$ (which may be quite different than
> in the investment's currency), and then count it as income under
> mark-to-market. That's what I do with my Cdn mutual funds, noting that it
> is a pain as you have to file a separate 8621 for each mutual fund owned.
> Hope that helps!

Thanks for the reply! I think I figured out how to do the market-to-market election, but I'm unsure of two line items in Part V:
◇ Line 15b, do I include distributions from when I was a non-resident of the US?
◇ Line 15c, do I include the number of years when I was a non-resident of the US?

screenshot of form: https://i.ibb.co/GF654Zt/Selection-001.png

Note: I'm making the MTM election for the first time (I was a non-resident for 2018 tax year), so IRS states you have to complete Part V of 8621 instead of Part IV for the first year you are making the MTM election.

[CdnAmerican]

Hi Misaki - sorry for the late reply! I think your follow-up is beyond the scope of what I know. I am a US citizen living in Canada, and so everything on my 8621 includes time spent outside the US. I don't know how that would apply for prior years on your end - that might be more of a CPA question. Good luck!