PFIC Question - Canadian Working in US

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lifegrowthfinance
Posts: 3
Joined: Sun Apr 13, 2025 8:10 pm

PFIC Question - Canadian Working in US

Post by lifegrowthfinance »

Hello,
I moved to the US in 2024 and established tax residency here in 2025. I have a brokerage account with a Canadian broker and own Canadian ETFs all of which provide the QEF AIS statement at the end of the tax year. I am trying to find the best way to file form 8621 and am receiving conflicting information.

Option 1 is to do a clean QEF election and fill out the necessary details based on the AIS issued by the fund houses. I have found information online which says I can't do this because of the PFIC taint as I purchased these funds between 2021 and 2024 when I was a Canadian resident for taxes. On the other hand, I am also seeing advice online which says I can in fact do a clean QEF election and don't need to do a deemed sale or dividend election as I was not required to do a QEF election when I purchased these funds as I was not a US person for taxes.

Option 2 is MTM and that is a pretty expensive option for me as well. So I am not completely ignoring it but it is on the backburner for now.

Option 3 is no election. As I read more into this one, I find that this might be a decent option as I don't plan on selling these funds while I work here in the US. My plan is to go back to Canada in a few years and then sell these funds. However, there is some ambiguity about proposed regulations which say that upon change of residency, non residents are deemed to have sold there interest in the PFICs and hence owe US taxes on those gains.

I am looking for some feedback on this. Personally I feel the clean QEF is the correct option but I am not seeing concrete evidence which says I can do it without consequence. Any help would be greatly appreciated!
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