1099B and 8621 relationship

greywolf · Post by **greywolf** » Thu Mar 12, 2015 1:59 am

Hi,
I had a mutual fund that I sold in 2014. I had initially filed the disposition gains in Part V of a 8621 but I just received today a 1099B form that provides the same information. This slightly confuses me since leaving the 8621 would mean that the gains on that disposition would be accounted for in both forms.

How should I handle this? Should I omit one of them?

MGeorge · Post by **MGeorge** » Thu Mar 12, 2015 9:42 am

That's a weird one.
I'd think receiving a 1099B would imply that the mutual fund is not a PFIC. Was this a US domiciled fund?
Are you a US citizen resident in Canada? If so, your brokerage shouldn't have sent you a 1099B for a Canadian mutual fund.

MGeorge · Post by **MGeorge** » Thu Mar 12, 2015 9:44 am

Hi greywolf, I just read your profile info and I see that you are a US resident. In this case, I'd take the "broker knows best" position and consider not filing 8621 for this fund, and just report the information on the 1099B. Unless you are sure that the fund is a PFIC, in this case, disregard the 1099B.

MGeorge · Post by **MGeorge** » Thu Mar 12, 2015 9:46 am

My writing is terrible today, here is what I meant to say:

Hi greywolf, I just read your profile info and I see that you are a US resident. In this case, I'd take the "broker knows best" position and consider not filing 8621 for this fund, and just report the information from the 1099B. Unless you are sure that the fund is a PFIC, in this case, disregard the 1099B, and file only 8621.

greywolf · Post by **greywolf** » Thu Mar 12, 2015 11:46 am

Thanks MGeorge. I am in fact a Canadian citizen living in the US. This fund is a Canadian fund that I sold in 2014. I'm going to go with the 1099B and get rid of the 8621. That was also my intuition and your answer gave me a bit more confidence.

Thanks!

nelsona · Post by **nelsona** » Thu Mar 12, 2015 12:08 pm

MGeorge's answer was to file a 8621 unless you knew it wasn't a PFIC. It is a PFIC if it is a Cdn mutual fund.

His reference to "dealer knows best" was if you were dealing witha US broker, which apparently you are not.

So, ignore the 1099B (which probably should not have been issued) and go with 8621, like MGeorge said.

greywolf · Post by **greywolf** » Thu Mar 12, 2015 12:19 pm

Meh, I guess that sounds right. I hate when some authority (broker) just adds to this already very confusing process.

greywolf · Post by **greywolf** » Thu Mar 12, 2015 11:57 pm

I was thinking about this some more and while I think filling a 8621 might be the way to go, I'm really hesitant to just disregard the 1099-B because that information is reported to the IRS by the broker. It feels like playing it dangerously to fail to report it when the IRS will already have that information, doesn't it?

MGeorge · Post by **MGeorge** » Tue Mar 24, 2015 9:57 am

Hi Greywolf,

I see your point. Couldn't you go ahead and claim the details from the 1099-B on your return, then file form 8621 and reduce the 8621 income by the amount already claimed on the 1099-B (schedule D). You could then attach an explanation.

Alternately, you could file 8621, and add a form 8275 to disclose your position - effectively explaining that you don't need to report the 1099 income on sch.D. because you have already captured it (less favourably) on form 8621.

It's your call.
Best Regards,

greywolf · Post by **greywolf** » Tue Mar 24, 2015 11:46 am

Thanks MGeorge! I filed my taxes yesterday before I saw your reply but I ended up contacting TaxACT support and they had also recommended using 8621s and adding a note regarding the fact that the information from 1099Bs was entered on 8621s.