I emigrated from Canada on Jan 1, 2011, so the mutual funds I owned at that time are deemed disposed of on that date for my Canadian 2011 taxes (i.e., I pay tax on those capital gains to Canada)
I sold all my funds 2 months later on Feb 4 2011.
I am now filing my US taxes, form 8621 for the PFIC. I am electing mark to market, and putting '0' for lines 5a,b,c (since the fund's value at the end of 2011 is $0 - make sense?).
My question is what to enter on line 8a and b. Since I am paying tax on capital gains in Canada for the fund's value on Jan 1, do I enter the 'difference' in values between Jan 1 and Feb 4, or do I enter the full value on Feb 4 and then account for the fact that I already paid tax on those capital gains to Canada somewhere else (foreign tax credit?).
Thanks!!
Dividing capital gains between Canada and the US
Moderator: Mark T Serbinski CA CPA
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Oceansunshine
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Under IRS rules you are suposed to report gain based on the 'original' cost basis (ie. the one you used to determine your deemed disposition gain)>
But, if you wish to only report the post-deemed disposition gain, then you neeed to follow the rules of Rev Proc 2010-19.
But, if you wish to only report the post-deemed disposition gain, then you neeed to follow the rules of Rev Proc 2010-19.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
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Oceansunshine
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- Joined: Mon Apr 02, 2012 8:46 pm
- Location: Florida
@nelsona - thanks for that, the Rev Proc 2010-19 was good to read about...after some more digging though, I am now concerned that I CANNOT elect mark-to-market in the same year I sold my funds...Is this correct? 2011 is both my first US tax year and the year I sold. Can I still mark-to-market?
If I am not eligible for mark-to-market, and I do not have enough info to QEF, where does that leave me? Excess Distributions? How do I calculate that if I was not a US resident prior to 2011 and thus could not have owed tax on the fund during those years?
If I am not eligible for mark-to-market, and I do not have enough info to QEF, where does that leave me? Excess Distributions? How do I calculate that if I was not a US resident prior to 2011 and thus could not have owed tax on the fund during those years?
How can you mark to market something that you no longer own? mark-to-market takes shares you hiold (at year-end) and 'pretend to sell them".
You have no shares to pretend to sell.
You have no shares to pretend to sell.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
If you acquire and dispose of PFIC stock in the same year, it doesn't matter whether it's a Section 1291 or 1296 stock. The penalties in Section 1291 don't apply if you do not hold the stock across a year-end, and both sections allocate the gains to ordinary income anyway.
I've read the first two sections of Rev. Proc. 2010-19 and it looks like you can simply let the PFIC be a Section 1291 fund and include the two months of gain as ordinary income.
This blog post describes a same-year PFIC disposition in depth: http://hodgen.com/pfic-excess-distribut ... same-year/
I've read the first two sections of Rev. Proc. 2010-19 and it looks like you can simply let the PFIC be a Section 1291 fund and include the two months of gain as ordinary income.
This blog post describes a same-year PFIC disposition in depth: http://hodgen.com/pfic-excess-distribut ... same-year/