I think I finally understand PFIC reporting under the mark to market election and would plan to make that election at least until I manage to sell my mutual funds, probably in 2011. But mechanically how does one initiate 8621 reporting starting with this years return (I have extended till Octobler) where the fund to be reported on was purchased over prior years?Apparently there was a recent ruling that Canadian domiciled mutual funds, even those organized as trusts, are considered PFICs. Does that make the reporting effective this year?
Appreciate to hear how others are handling this.
Regards,
initiating reporting on Canadian Mutual Funds as PFICs
Moderator: Mark T Serbinski CA CPA
You can't use MTM begininng this year. MTM election has to be timely. Unless you want to go back and amend old returns starting from when you purchased the PFICs, you can't use MTM.
The other alternative is to use the default method of excess distributions, but if you received dividends or made dispositions in previous years, then those returns should be amended.
The other alternative is to use the default method of excess distributions, but if you received dividends or made dispositions in previous years, then those returns should be amended.