Question on Form 8621

[JG EA]

I have a client that owns an interest in a Passive Foreign Investment Company - Nordic American Tanker Shipping Ltd. He has only bought stock, not sold anything or received any distributions as far as I know.

He received a letter from the company after his taxes were filed with information to file Form 8621. According to an item on the internet "...you are required to file Form 8621" just for owing stock in the company. However on the form instructions it looks look you only need to file if you are making some kind of election that I know nothing about.

Has anyone had any experience with this sort of situation?

Thanks,
JG

[Bees Knees]

Form 8621 instructions say the following:

Who Must File
Generally, a U.S. person that is a direct or
indirect shareholder of a PFIC must file
Form 8621 for each tax year in which that
U.S. person:
• Recognizes gain on a direct or indirect
disposition of PFIC stock,
• Receives certain direct or indirect
distributions from a PFIC, or
• Is making an election reportable in Part
I of the form.

Assuming your client didn't dispose of any of his stock or didn't receive a direct of indirect distribution, the only other reason to file is to make the election. If I were you, I would read the Form 8621 instructions to see if the election is something your client needs to be concerned about.

[JG EA]

Thanks

I thought I'd work through the form, but it's such an unfamilar area. I could make up some numbers and see what the result would be.

PS - I found this site (2003 but should be OK) that simplifies it. Perhaps it may come in handy for others some time.

https://www.offshorepress.com/AICPA/form8621.htm