Hello,
I have some questions about tax implication about PFIC stocks, more specifically, a foreign fund that is considered a PFIC. This is not directly related to retirement, but I've found several informative threads about PFIC in this forum, so I'm hoping someone can enlighten me about these things.
The questions are:
1. if the tax payer chooses the 'mark-to-market' election for the stock, and if the fund distributed dividends in the corresponding tax year, what the tax payer should do about the dividends? Should this be reported as ordinary dividends, or reported in some other way?
2. assuming the dividend income is reported in some way, if foreign tax was withheld from the income, can the tax payer claim a foreign tax credit (suppose the credit could be claimed wrt other terms than PFIC related rules).
Neither Form 8621 instruction nor section 1296 clarifies these questions. I'd appreciate it very much if someone can answer them, ideally with the rationale of the answer. Thanks.
I have some questions about tax implication about PFIC stocks, more specifically, a foreign fund that is considered a PFIC. This is not directly related to retirement, but I've found several informative threads about PFIC in this forum, so I'm hoping someone can enlighten me about these things.
The questions are:
1. if the tax payer chooses the 'mark-to-market' election for the stock, and if the fund distributed dividends in the corresponding tax year, what the tax payer should do about the dividends? Should this be reported as ordinary dividends, or reported in some other way?
2. assuming the dividend income is reported in some way, if foreign tax was withheld from the income, can the tax payer claim a foreign tax credit (suppose the credit could be claimed wrt other terms than PFIC related rules).
Neither Form 8621 instruction nor section 1296 clarifies these questions. I'd appreciate it very much if someone can answer them, ideally with the rationale of the answer. Thanks.
