Hi,
I have some questions regarding PFIC (8621). I just aware that I need to file PFIC for my AGF mutual fund accounts . I am Canadian and moved to US approx 20 years ago.
I have three mutual fund accounts with AGF investment ( I keep them and do not do anything after I moved to USA) . two are under RRSP which I elected 8891 back to 10+ years ago ( in year 2014, form 8891 is no longer be used but is filed under statement of specified foreign financial assets -form 8938 instead) and one is regular mutual funds.
In the past , Some years AGF will send me the 1099 D to report ( In 1099 D it always shows the payor is Citigroup fund services Canada Inc), the letter attached stated that Citigroup fund service Canada act as administration for AGF funds. inc.
When I received 1099 D ( most of them under my RRSP account, sometime are both RRSP accounts and mutual fund account ). In order to avoid unnecessary hassle, I always report 1099 D in that years as ordinary income..no matter is under RRSP or regular mutual fund. I just learn that I need to report my one AGF mutual fund account under PFIC. this account normally have no dividend for years. My questions are
1) If AGF is consider USA company or not ? ( because they are able to issue 1099 D to me , have payor id number in 1099 D form)
2) If AGF is not consider USA company, and I need to file my PFIC. This mutual fund account is less than than $10,000. I read the article under IRS website, TD 9650 that allow you to not file form 8621 ( PFIC) end 12/31/2013. If the total account is under $25K single or $50K couples. and
you do not have distribution or sell , then you can file start year 2014.
I plan to elect M2M in my 2014x; my questions are
1) I have loss for less than $100 (FMV ), can I take the deduction in the first year, after tax calculation, maybe refund me less then $20
2) I am using Turbo Tax, where do I put this loss
3) Back to few years ago, I think I have one dividend that is from my mutual fund, but amount is less than $300 (I think is reinvestment div), and I report it as ordinary income alone with other AGF RRSP dividends.at that years already. Since TD 9650 allow us to start file from year 2014, what consequence Ii will have if I elect M2M for year 2014 ?
PFIC questions
Moderator: Mark T Serbinski CA CPA
Hi Canadalady,
It is my understanding that AGF mutual funds would be considered PFICs for US tax purposes. The fact that they have sent you a 1099-div in the past is likely an error on their part. I have read elsewhere on this forum that fidelity investments used to issue 1099-divs, even though these funds are clearly PFICs.
Anyway - you say that you have been declaring the income from these 1099 forms as ordinary dividends. Since 2/3 of your accounts were RRSP, then you didn't actually have to do this since the deferral was taken care of by your 8891 filings.
Regarding the filing of form 8621:
Your taxable account with this AGF fund it is less than 25k, so, you don't have to file 8621 if you didn't receive an "excess distribution", and you didn't sell with a gain. Selling with a loss and not filing 8621 is fine as I've just learned. Are you sure you don't have an excess distribution in 2014? Since you want to elect mark-to-market, then this action requires filing form 8621. Now with your specific questions:
1. AGF is a Canadian domiciled mutual fund company as far as I know. You should confirm this. Maybe they have a US fund company?
2. You need to file 8621 to elect mark-to-market in 2014. I can't determine if you need to amend past returns in previous (I wouldn't bother - you reported the dividends after all).
1. When did you have a loss of $100? Did you sell it? Either way - you can declare a loss for selling a PFIC. Code section 1001 allows this - and it would go on schedule D.
2. Does TurboTax support form 8621? It didn't the last time I looked but this was 2 years ago. Either way, your loss goes on schedule D. I use TaxACT which definitely has form 8621
3. This dividend might have been considered an excess dividend. Maybe, maybe not, I wouldn't worry about it. When you chose the mark-to-market option, you still do report your dividends as ordinary dividends (not qualified). This is in the code. The mark-to-market option only covers gains and losses. So, for example, if you get a $300 dividend, you report this on schedule B. If it got re-invested in the fund, then this is treated like you bought $300 more of the fund (ie. it gets added to your cost base). It is easy to miss this and double report the income.
Best of luck! Regards.
It is my understanding that AGF mutual funds would be considered PFICs for US tax purposes. The fact that they have sent you a 1099-div in the past is likely an error on their part. I have read elsewhere on this forum that fidelity investments used to issue 1099-divs, even though these funds are clearly PFICs.
Anyway - you say that you have been declaring the income from these 1099 forms as ordinary dividends. Since 2/3 of your accounts were RRSP, then you didn't actually have to do this since the deferral was taken care of by your 8891 filings.
Regarding the filing of form 8621:
Your taxable account with this AGF fund it is less than 25k, so, you don't have to file 8621 if you didn't receive an "excess distribution", and you didn't sell with a gain. Selling with a loss and not filing 8621 is fine as I've just learned. Are you sure you don't have an excess distribution in 2014? Since you want to elect mark-to-market, then this action requires filing form 8621. Now with your specific questions:
1. AGF is a Canadian domiciled mutual fund company as far as I know. You should confirm this. Maybe they have a US fund company?
2. You need to file 8621 to elect mark-to-market in 2014. I can't determine if you need to amend past returns in previous (I wouldn't bother - you reported the dividends after all).
1. When did you have a loss of $100? Did you sell it? Either way - you can declare a loss for selling a PFIC. Code section 1001 allows this - and it would go on schedule D.
2. Does TurboTax support form 8621? It didn't the last time I looked but this was 2 years ago. Either way, your loss goes on schedule D. I use TaxACT which definitely has form 8621
3. This dividend might have been considered an excess dividend. Maybe, maybe not, I wouldn't worry about it. When you chose the mark-to-market option, you still do report your dividends as ordinary dividends (not qualified). This is in the code. The mark-to-market option only covers gains and losses. So, for example, if you get a $300 dividend, you report this on schedule B. If it got re-invested in the fund, then this is treated like you bought $300 more of the fund (ie. it gets added to your cost base). It is easy to miss this and double report the income.
Best of luck! Regards.
------------------------------
MGeorge is neither an accounting nor taxation professional.
MGeorge is neither an accounting nor taxation professional.
You were issues a 1099-DIV because the fund received US dividends, not because AGF is a US company: it is not, and likely there was some tax withheld. That tax should be used on your 1040.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
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Canadalady
- Posts: 3
- Joined: Wed Apr 29, 2015 10:42 pm
Thank you both of you immediately response.
I spent more than 15 hours just for reading
IRS tax code, it is terrible. In order for me to avoid
Unnecessary trouble， I decide to go for 1040x
.the different in the tax amount is less than$15.
I was lucky that this few years AFG for that specific
Fund that I have, no div, no interest.
However, for my RRSP accounts, it is always have 1099
Div. Does any one know how to stop them to doing this?
Thanks you
I spent more than 15 hours just for reading
IRS tax code, it is terrible. In order for me to avoid
Unnecessary trouble， I decide to go for 1040x
.the different in the tax amount is less than$15.
I was lucky that this few years AFG for that specific
Fund that I have, no div, no interest.
However, for my RRSP accounts, it is always have 1099
Div. Does any one know how to stop them to doing this?
Thanks you