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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Special Rules allocated to the election year. Enter the sum (without regard to extensions) of your
on line 10. income tax return for the tax year to which an
For purposes of this election, the following • With respect to the amounts allocated to increase in tax is attributable and ending with
apply. each tax year in your holding period other the due date (without regard to extensions)
• The basis of the shareholder's stock is than the election year and the pre-PFIC of your income tax return for the election
increased by the gain recognized on the years, see the instructions for Line 14. year.
deemed sale. The manner in which the basis
adjustment is made depends on whether the Lines 18 and 19
shareholder is a direct or indirect Lines 11 and 12
shareholder. See Regulations section The shareholder's income tax liability is The line 18 subtotal represents all amounts
1.1297-3(b)(5). generally the amount shown on the “total tax” due as of the due date (without regard to
• For purposes of the PFIC rules only, the line of the return. extensions) of the shareholder's income tax
return for the election year. The shareholder
shareholder's new holding period begins on making the late deemed dividend or late
the CFC qualification date. Line 14
• The election can be made for stock on Determine the increase in tax for each tax deemed sale election must pay additional
which the shareholder will realize a loss, but year in your holding period other than the interest on the amount on line 18 from the
that loss cannot be recognized. In addition, election year and pre-PFIC years (that is, for due date (without regard to extensions) of its
there is no basis adjustment for a loss. each PFIC year). An increase in tax is income tax return for the election year up to
determined for each PFIC year by multiplying and including the date the Form 8621-A and
the part of the distribution or disposition payment are filed with the IRS. Include this
How To Make the Election allocated to each year (see Lines 9b and 10, interest amount on line 19.
To make this election, check box D in Part I earlier) by the highest rate of tax under
and complete Part III, lines 5, 6, and 8, and section 1 or section 11, whichever applies, in Closing Agreement
Part IV. effect for that tax year. Add the increases in If the election year is a closed tax year, file
tax computed for all PFIC years. Enter the the closing agreement on page 3 of the form
For more information on making Election aggregate increases in tax (before credits) in duplicate. Both copies must contain
D, see Regulations sections 1.1297-3(b) and on line 14. original signatures. Photocopies of
signatures aren’t acceptable. The closing
(e). Line 15 agreement on page 3 of the actual form you
To determine the foreign tax credit, the file is the IRS copy. The photocopy of the
Part IV. Computation of shareholder of a section 1291 fund closing agreement that you attach to the
determines the total creditable foreign taxes 4-page form is the taxpayer copy. Write
Tax and Interest Due attributable to the distribution. The total “Taxpayer Copy” in the upper margin of this
creditable foreign taxes with respect to any copy. File the taxpayer copy as the first
Line 9a distribution are the withholding taxes attachment after the 4-page form. The
Enter the amount treated as an excess imposed on the distribution and, in the case taxpayer copy will be returned to you after an
distribution under the deemed dividend or of a foreign corporation year beginning authorized IRS official has signed it.
deemed sale election. This amount is: before January 1, 2018, for 10% or greater
• In the case of a deemed dividend election corporate shareholders, any taxes deemed Identifying number. Individuals should
for a former PFIC, the amount on line 3 of paid under section 902. The taxes must be enter a social security number or taxpayer
Part II. creditable under general foreign tax credit identification number issued by the IRS.
• In the case of a deemed sale election for a principles and the shareholder must choose Entities must enter an employer identification
former PFIC, the amount on line 4 of Part II. to claim the foreign tax credit for the current number.
• In the case of a deemed dividend election tax year.
for a Section 1297(e) PFIC, the amount on Balance Sheet
line 7 of Part III. The excess distribution taxes (the
• In the case of a deemed sale election for a creditable foreign taxes attributable to an If the shareholder is making a late deemed
Section 1297(e) PFIC, the amount on line 8 excess distribution) are allocated in the sale election with respect to a former PFIC or
of Part III. same manner as the excess distribution is a Section 1297(e) PFIC (Election B or D), the
allocated. See the instructions for Lines 9b shareholder is required to complete the
Lines 9b and 10 and 10 and Line 14, earlier. Those taxes balance sheet on page 4 of Form 8621-A.
Determine the allocation of the excess allocated to pre-PFIC tax years and the
distribution to all applicable tax years on a election year are taken into account for the Note. If the PFIC uses the U.S. dollar
separate sheet and attach it to Form 8621-A. election year under the general rules of the approximate separate transactions method
Divide the amount on line 9a by the number foreign tax credit. of accounting (DASTM), the balance sheet
should be prepared and translated into U.S.
of days in your holding period. The holding The excess distribution taxes allocated to dollars according to Regulations section
period of the stock is treated as ending on: a PFIC year only reduce the increase in tax 1.985-3(d), rather than U.S. GAAP.
• The termination date, in the case of a figured for that tax year (but not below zero).
deemed sale or deemed dividend election No carryover of any unused excess
for a former PFIC; distribution taxes is allowed. Line 11
• The CFC qualification date, in the case of When you dispose of PFIC stock, the You must attach to Form 8621-A a written
a deemed sale election for a Section 1297(e) above foreign tax credit rules apply only to narrative for each intangible asset describing
PFIC; and the part of the gain that, without regard to how the asset valuation was determined.
• The day before the CFC qualification section 1291, would be treated under section This narrative must include all pertinent
date, in the case of a deemed dividend 1248 as a dividend. valuation information including whether the
election for a Section 1297(e) PFIC. valuation was done by a third party. If the
Line 16 valuation was done by a third party, include
Determine the amount allocable to each the name and business address of that third
tax year in your holding period by adding the This amount is the aggregate increases in
amounts allocated to the days in each such taxes on the excess distribution within the party in the narrative.
tax year. Then: meaning of section 1291(c)(2).
Disclosure, Privacy Act, and Paperwork
• Add the amounts allocated to the tax Line 17 Reduction Act Notice. We ask for the
years before the foreign corporation became Compute the interest on each net increase in information on this form to carry out the
a PFIC (pre-PFIC years) and amounts tax for the period beginning on the due date Internal Revenue laws of the United States.
-4- Instructions for Form 8621-A (Rev. 12-2018)
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