Contact UsI have a client with foreign mutual fund holdings that I need to report on Form 8621 but I am not sure how to handle the multiple distributions and dividends paid out. Can I simply include the dividends on the tax return?
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Tax Professional Answers
Mary Beth Lougen EA USTCP
The short answer is no. Foreign mutual fund holdings and ETFs have different reporting requirements than similar U.S. funds and must be reported on Form 8621. Although there is no monetary penalty at this time for failing to file Form 8621, the statute of limitations on your client's entire tax return will be tolled or suspended indefinitely if your client fails to report certain information required by law under IRC 6501(c)(8) which specifically mentions PFICs reg sections 1295(b) & 1298(f).
Form 8621 is time consuming. The IRS estimates it will take a trained tax professional 24 hours to complete the form. There are options like Form 8621 Calculator software that does all the calculation and only requires the numbers from your client's mutual fund statements to complete the form.
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429 weeks ago
Form 8621 is time consuming. The IRS estimates it will take a trained tax professional 24 hours to complete the form. There are options like Form 8621 Calculator software that does all the calculation and only requires the numbers from your client's mutual fund statements to complete the form.