Form 8621 example-2025

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The document contains detailed calculations and forms related to the tax implications of distributions from a Passive Foreign Investment Company (PFIC) for an individual taxpayer, John Smith. It includes Form 8621, which outlines the reporting requirements for shareholders of PFICs, detailing excess distributions, foreign tax credits, and interest on tax liabilities over several years. Additionally, it features Form 1040 for the U.S. Individual Income Tax Return for the year 2016, summarizing income, deductions, and credits.

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Click ‘Get Form’ to open the form 8621 example in the editor.
Begin by entering your name and identifying information at the top of the form. Ensure that your details are accurate to avoid processing delays.
In Part I, provide details about your shares of the Passive Foreign Investment Company (PFIC). Fill in the description, acquisition date, and number of shares held.
Complete the financial sections by entering values for distributions and excess distributions as required. Use precise figures to ensure correct calculations.
In Part II, make any necessary elections regarding your PFIC treatment. Carefully read each option and select those applicable to your situation.
Review all entries for accuracy before submitting. Utilize our platform’s features to save and share your completed form easily.

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What is the reporting threshold for form 8621?

Who must file IRS Form 8621? Any U.S. personwhether an expat, resident, or shareholderwho holds PFIC investments, receives distributions, or disposes of PFIC stock must file Form 8621. Filing requirements also apply if your aggregate PFIC value exceeds $25,000 (or $50,000 if filing jointly).

What is the exception to filing form 8621?

There are not many exceptions to having to file Form 8621. But, for some taxpayers who may qualify as having less than $25,000 in total PFICs ($50,000 Married Filing Jointly) and no excess distributions in the current year of reporting, they may be able to limit their reporting.

Does form 8621 need to be filed every year?

If you hold a PFIC, Form 8621 must be filed with your annual federal tax return for the relevant tax year. Its an information returnbut not filing it can delay your return or trigger penalties.

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What happens if you dont file form 8621?

Not filing Form 8621 can lead to an incomplete tax return, which in IRS terms, means they can audit you indefinitely. Or, this could result in penalties and interest accruing on any unpaid taxes related to your PFIC holdings.

What qualifies as foreign-sourced income?

The source of your earned income is the place where you perform the services for which you receive the income. Foreign earned income is income you receive for performing personal services in a foreign country. Where or how you are paid has no effect on the source of the income.

What is reported on form 8621?

A U.S. person that is a direct or indirect shareholder of a passive foreign investment company (PFIC) files Form 8621 if they: Receive certain direct or indirect distributions from a PFIC. Recognize a gain on a direct or indirect disposition of PFIC stock.

What foreign assets must be reported to the IRS?

Specified foreign financial assets include foreign financial accounts and foreign non-account assets held for investment (as opposed to held for use in a trade or business), such as foreign stock and securities, foreign financial instruments, contracts with non-U.S. persons, and interests in foreign entities.

What is the IRS form 8621 used for?

Form 8621 is used to report information about PFICs (Passive Foreign Investment Companies) to the IRS.