How to report dividends from QEF PFIC?

[skierbob]

If I own a dividend-paying Canadian ETF for which I elect to treat as a QEF, how should the dividends be reported to the IRS? Is a 1099-DIV form required, or is that dividend income already taxed as part of the “ordinary income” reported on the 8621 form?

Section 1293(c) (www.law.cornell.edu/uscode/text/26/1293) of the IRS tax code says "Previously taxed amounts distributed tax free." Namely: "If [...] any amount distributed by a passive foreign investment company is paid out of earnings and profits of the company which were included under subsection (a) in the income of any United States person, such amount shall be treated [...] as a distribution which is not a dividend; except that such distribution shall immediately reduce earnings and profits."

Does this mean that the dividends are not taxed directly, because they were already indirectly taxed when included as 'ordinary income' in the 8621? If I don't need to be taxed on the distributions, do I need to report it at all? What does the last part mean: "such distribution shall immediately reduce earnings and profits"? Is this related to Section 1293(d), which states that the cost basis of the shares are adjusted upward by the amount of the earnings?

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Hypothetical example

For example, suppose hypothetically I own some shares of XIC. BlackRock provides annual PFIC reporting statements to allow a QEF election. For example, the 2022 statement (www.blackrock.com/ca/investors/en/liter ... c-env1.pdf) has the following information (I'm using 2022 because the 2023 statement is not yet available):
- Ordinary Earnings per-day per-share (US$): 0.0021251392
- Net Capital Gains per-day per-share (US$): 0.0048595172

If I owned, say, 1000 shares for a total of 180 days in 2022, on my 8621 form I would report:
- ordinary earnings of: 0.0021251392*180*1000 = 382.52 US$, and
- net capital gains of: 0.0048595172*180*1000 = 874.71 US$

But XIC also paid quarterly dividends. So if I owned the shares from July to December, I would have been paid dividends of 0.273 CAD$ and 0.238 CAD$ per share, for a total of 511.00 CAD$, which is pretty close to the 382.52 US$ reported above.

Would I need to report and/or get taxed on those dividends? It seems like those dividends are being paid directly out of the fund's "ordinary income".