F3520 and F8621 for a TFSA account

[curiousCase2018]

I am filing for the first time as a US resident. I have TFSA accounts in Canada. They are spread out between mutual funds, GICs and index funds. None of the accounts individually are more than 25,000US$. Thus, I believe I do not have to file form 8621 becasuse indivdually they are not above $25,000 and I am exempt from it? For context, I have two mutual funds worth 7k each.

I did not make any transactions in any of my TFSA accounts in the tax year 2017 and hence I believe I do not have to do form 3520 or 3520-A either? I am not completely certain about this.

Thanks for the help!

[whiterhino]

The $25000 limit is aggregate from all PFIC shares (not accounts). The limit increases to $50000 for married filing jointly. If your $14000 position in mutual funds represents the total aggregate from all accounts, then you are not required to file 8621 as long as you don’t have any transactions, dispositions, or distributions. In some cases, it may still be advantageous to file 8621 to make an election for QEF or MtM, which are more tax efficient than 1291 PFICs. In your case, it might make more sense to divest from the TFSAs because there is no tax advantage under U.S. tax law. You should certainly consider at least divesting from the index funds and mutual funds to avoid the 8621 form altogether. My understanding is that you still need to file 3520.