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Form 8621

FORM 8621 PREPARATION
SERVICE

PFIC Pro’s team of PFIC experts are here to help you take the stress out of your PFIC filings.To get started we need to understand what you need from us, take care of some basic business and gather the information needed to prepare Form 8621.

The calculations for passive foreign investment companies are very complex and layered. When you work with the PFIC Pro team, your greatest challenge will be compiling the information from the bank or financial institution. We need a history of all the transactions during the time you owned the PFIC shares. This means any transaction that changed the number of shares that you own and any income generated by the investment- this could be an acquisition (increases # units owned) or a disposition by sale or gift (decreases # units owned), or any distribution of money or property, including but not limited to dividends, return of capital, interest, capital gains distributions and rebate of fees or taxes.

How to Get Started

Please utilize the attached Excel workbook for the work order to furnish us with all the necessary details for your form preparation service.

Download the PFIC Workbook

Client Intake Tab – Tell Us About Yourself


The Client Intake Tab of the PFIC Workbook helps us collect the basic information we need to assist in preparing your Form(s) 8621.
Please provide:

  • Your full name and contact details
  • The date you became a U.S. Person (see explanation below)
  • Your current address

Why your address is required:
We use your address for billing and to determine whether we need to collect Canadian GST/HST/PST on your final invoice. If you choose not to provide your address, we are required to charge 13% Ontario HST by default.

SSN or ITIN

We DO NOT require your U.S. SSN or ITIN. These are highly sensitive pieces of personal information and should be protected at all times.

  • You may provide it as a courtesy if you’d like it added to the final Form 8621
  • Your SSN or ITIN is not entered into our PFIC-Pro software
  • If provided, it is added using a local desktop script and is never stored, archived, or transmitted

We retain a copy of your completed Form 8621 PDF for at least 3 years on our secure server.

U.S. Person Status – Why It Matters

We also need to know the date you became a U.S. Person, as PFIC taxation is applied differently before and after this point.
A U.S. Person is someone who is subject to U.S. taxation. This can be based on citizenship, residency, or meeting certain tests.
You can refer to IRS Publication 519 for more detail or consult your tax professional.

Examples:

  • U.S. Citizen from birth → You became a U.S. Person on your date of birth
  • Green Card holder → You became a U.S. Person on the earlier of:
    • The date you received your Green Card, or
    • The first day you met the Substantial Presence Test in your first year in the U.S.
  • Substantial Presence Test → You became a U.S. Person on the first day present in the U.S. during the tax year you meet the test

It is important to provide the correct date. PFIC taxation differs depending on whether you were a U.S. Person at the time.

Tax Years to File

Lastly, let us know for which year(s) you need us to prepare Form 8621.
We’ll use this to organize your data and ensure accurate annual filings.

PFIC Workbook Tab – Tell Us About Your PFICs


Each PFIC will need its own tab in the workbook.

Please include the general information in columns A-C and any pertinent notes for us in the notes section starting at cell B26.

We need to know the history of every unit you own on January 1 of each year for which we are preparing Form 8621.

PFIC taxation is calculated for each unit separately based on:

  • Its holding period (from acquisition date to disposition date)
  • Spot rate currency conversions to USD for all related transactions (purchases, dividends, etc.)
  • Prior year excess and non-excess distributions

This is a complex calculation — if it were easy, you wouldn’t need our help!

We will handle all currency conversions and calculations; we just need you to provide the transactions in the original currency of the investment.

Attention to detail and accuracy with the transactions will allow us to prepare your final form much more quickly. In addition to the transactions, please provide your account statements for reference.

Transactional Information Begins in Cell E1

Value of Units on the Date You Became a U.S. Person

Enter the market value of the investment on the date you became a U.S. taxpayer. You can enter either the total value or the per-share price. Be sure to tick the per-share box if applicable.

End of Year Values

Enter the December 31 total number of shares you own and the fair market value for each year we are preparing. If you paid any taxes to the foreign country on this specific PFIC, enter them in Column I for each year. A U.S. foreign tax credit may (or may not) be available.

Transaction History Grid Instructions

Column Instructions
Column E Enter the date of each transaction. The month will display in text format to avoid confusion between MM/DD/YYYY and DD/MM/YYYY.
Column F (Type of Transaction) Select from the dropdown whether the transaction increases, decreases, or does not change the total number of units you own.
Column G From the dropdown, select the option that most accurately reflects the transaction. If no option applies, please add a note in the Notes Section starting at B26.
Column H Enter the number of units acquired or disposed of. If you are only receiving a cash distribution, leave this field blank. If you enter “NoChangeShares” in Type of Transaction and a number in Column H, the Total Units Owned column will turn orange, indicating a data entry error.
Column I Enter the currency amount of the acquisition, disposition, or distribution in the original (functional) currency of the investment. We will handle the conversion to USD.
Columns J & K These are calculated fields and should not be edited. They serve as checkpoints while you complete the spreadsheet.
Column J Shows a running total of the shares you own on each transaction date. These should match your periodic statement balances. Note: entering “No ChangeShares” in Type of Transaction along with a number in Column H will cause this column to turn orange as an error indicator.
Column K Displays the per-unit price for each transaction. This cell will turn yellow if the unit price changes by 10% or more compared to the previous transaction. Please verify your entries for any yellow cells.

Sending Documents Securely


Once you have filled out the PFIC Workbook, please send it to us securely using one of the following methods:

  • If you already have an e-courier account, please use it to submit your documents.
  • If you do not have an account, you can securely upload your workbook using this link:
    https://e-courier.ca/aQ?is=bDZln3nHnYE0

Please do not email your personal information or statements.
For your security, always use one of the secure transfer methods we provide.

The easiest and fastest option is e-courier Canada.

Definitions

US Person

as defined in §7701(a)(30)- a citizen or resident of the United States, a domestic corporation, domestic partnership domestic estate, and any trust that meets the court and control tests.

  • US citizen
  • Lawful permanent resident (Green Card holder)
  • Filing a US Form 1040 as a resident of the United States

Purchases

acquisition of shares/units in exchange for currency (foreign or USD)

Switch to new fund

Moving the fair market value of existing units in a PFIC investment into a
different PFIC investment. This could be simply a change of share classes or a change to a different mutual fund offered by the same parent company. Often mutual fund switches are not taxable events in the country of investment. Switches are considered a sale of the original PFIC and the purchase of a new PFIC for US tax purposes.

Involuntary switch

The transfer of PFIC units to another passive foreign investment company
when the original PFIC ceases to exist, such as a merger with another fund, a name change, etc…
There was no opportunity for the investor to remain with the original investment.

Switch to new account

Transferring the PFIC to a different bank or financial institution. The
units do not change as a result of the move, only the location where the PFIC is housed changes.
This is not a taxable event for US PFIC purposes.

Reinvested dividend

Using a cash dividend paid by a PFIC to purchase more shares of the same
investment.

Distribution

any actual or constructive transfer of money or property by a §1291 fund with
respect to its stock.

Dividends

A distribution of profits to unit holders. Cash amounts received by the investor.

Return of capital

A distribution not made from profits of the investment, but instead is a return
of the unit holders’ original investment

Capital Gains

A payment made to the unit holders of an investment that represents a portion of
proceeds from the investment’s sale of stocks, bonds, PFICs or other assets from within its portfolio.

Rebate (taxes and fees)

Return of fees or taxes previously withheld from the unit holder. These can be in cash or reinvested to purchase additional shares.

Other Income

Any income not defined above.