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Department of the Treasury
Internal Revenue Service
Instructions for Form 8621

(Rev. January 2022)

(Use with the December 2018 revision of Form 8621.)
Information Return by a Shareholder of a Passive Foreign Investment Company or
Qualified Electing Fund

Section references are to the Internal Revenue its amended federal income tax return Passive Foreign Investment
Code unless otherwise noted. for the tax year to which it relates, if the Corporation (PFIC)
U.S. shareholder can demonstrate that
Future Developments the reason for not filing the form with its Generally, a U.S. person that is a direct
For the latest information about original return was due to reasonable or indirect shareholder of a PFIC must
developments relating to Form 8621, cause. See Election To Be Treated as a file Form 8621 for each tax year under
and its instructions, such as legislation Qualifying Insurance Corporation for the following five circumstances if the
enacted after they were published, go to revised instructions that incorporate the U.S. person:
IRS.gov/Form8621. changes made by the final regulations. 1. Receives certain direct or indirect
distributions from a PFIC,
Additional updates to these instruc-
What’s New tions. With respect to certain amounts 2. Recognizes gain on a direct or
New rules regarding the election to on Form 8621 that are reported on indirect disposition of PFIC stock,
be treated as a Qualifying Insurance income tax returns, some of the 3. Is reporting information with
Corporation that a U.S. shareholder references to Form 1040 (on pages 11 respect to a Qualified Electing Fund
may apply retroactively. Final through 14 of these instructions) have (QEF) or section 1296 mark-to-market
regulations were issued under sections been updated to reflect further redesign election,
1297 and 1298 (T.D. 9936, 86 FR 4571, of Form 1040 for tax year 2021. 4. Is making an election reportable
Jan. 15, 2021, as amended by T.D. The line 16f instructions were in Part II of the form, or
9936, 86 FR 13648, Mar. 10, 2021). The modified to update the Revenue Ruling 5. Is required to file an annual report
regulations under section 1297 change for the rates for interest determined pursuant to section 1298(f). See the
the requirements for the election of a under section 6621. Part I instructions, later, for more
U.S. person that is a shareholder of a information regarding the person that
foreign corporation to treat stock of a Reminders must file pursuant to section 1298(f).
foreign corporation as stock of a
qualifying insurance corporation for the Election to be treated as a Qualifying A separate Form 8621 must be filed
U.S. shareholder's tax years beginning Insurance Corporation. A checkbox for each PFIC in which stock is held
on or after January 14, 2021, and for was added on page 1 of Form 8621 for directly or indirectly. In the case of a
any open tax year in which the U.S. shareholders of stock of a foreign chain of ownership, under the five
shareholder chooses to apply the new corporation that elect to treat such stock circumstances described above, unless
rules beginning after December 31, as the stock of a qualifying insurance otherwise provided, if the shareholder
2017, and before January 14, 2021, corporation under section 1297(f)(2), owns one PFIC and through that PFIC
provided the U.S. shareholder which was added by section 14501 of owns one or more other PFICs, the
consistently applies the final regulation's the Tax Cuts and Jobs Act (TCJA). For shareholder must file a Form 8621 for
insurance provisions to the foreign more information, see Election To Be each PFIC in the chain.
corporation for which the election is Treated as a Qualifying Insurance
being made (Regulations sections Corporation, later. A single Form 8621 may be filed
1.1297-4 and 1.1297-6) for such year with respect to a PFIC to report the
information required by section 1298(f)
and all subsequent years. The new rules General Instructions (that is, Part I), as well as to report
(1) expand the availability of the election
information in Parts III through VI of the
to include a U.S. person who is Who Must File form and to make elections in Part II of
considered to own stock in the foreign
corporation by reason of holding an Qualifying Insurance the form. For example, a U.S. person
that has made a section 1296
option; (2) provide a deemed election Corporation mark-to-market election with respect to
for small shareholders in publicly traded A U.S. person that owns stock (or holds a PFIC will file a single Form 8621 and
companies (as described in Regulations an option to purchase stock) of a foreign complete Part I and Part IV.
section 1.1297-4(d)(5)(iv)); (3) no longer corporation and elects to treat such
require a U.S. shareholder making the stock as the stock of a qualifying Indirect shareholder. Generally, a
election to attach a copy of the insurance corporation under the U.S. person is an indirect shareholder of
statement from the foreign corporation alternative facts and circumstances test a PFIC if it is:
described in Regulations section within the meaning of section 1297(f)(2) • A 50%-or-more shareholder of a
1.1297-4(d)(5) to the Form 8621 and Regulations section 1.1297-4(d) foreign corporation that is not a PFIC
attached to its federal income tax return must file a limited-information Form and that directly or indirectly owns stock
for the tax year to which it relates; and 8621. For details, see Election To Be of a PFIC,
(4) allow a U.S. shareholder to make the Treated as a Qualifying Insurance
election by attaching the Form 8621 to Corporation, later.

Dec 16, 2021 Cat. No. 10784P

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• A shareholder of a PFIC where the When and Where To File the stock in the PFIC. This exception
PFIC itself is a shareholder of another Attach Form 8621 to the shareholder's does not apply to option holders. For
PFIC, tax return (or, if applicable, partnership more information, see section 1297(d).
• A 50%-or-more shareholder of a or exempt organization return) and file Note. The attribution rules of section
domestic corporation where the both by the due date, including 1298(a)(2)(B) will continue to apply
domestic corporation owns a section extensions, of the return at the Internal even if the foreign corporation is not
1291 fund, or Revenue Service Center where the tax treated as a PFIC with respect to the
• A direct or indirect owner of a return is required to be filed. shareholder under section 1297(d).
pass-through entity where the
pass-through entity itself is a direct or If you are not required to file an
indirect shareholder of a PFIC. income tax return or other return for the Qualified Electing Fund (QEF)
For more information on determining tax year, file Form 8621 directly with the Election
whether a U.S. person is an indirect Internal Revenue Service Center, A PFIC is a QEF if a U.S. person who is
shareholder, see Regulations section Ogden, UT 84201-0201. a direct or indirect shareholder of the
1.1291-1(b)(8). PFIC elects (under section 1295(b)) to
Definitions and Special treat the PFIC as a QEF and complies
For purposes of these rules, a with the requirements described in
pass-through entity is a partnership, S Rules
section 1295(a)(2). See the instructions
corporation, trust, or estate. Passive Foreign Investment for Election A, later, for information on
However, a U.S. person that owns Company (PFIC) making this election.
stock of a PFIC through a tax-exempt
A foreign corporation is a PFIC if it
organization or account described in the Tax Consequences for
meets either the income or asset test
list below is not treated as a shareholder
described next. Shareholders of a QEF
of the PFIC.
• An organization or an account that is 1. Income test. 75% or more of the • A shareholder of a QEF must
exempt from tax under section 501(a) corporation's gross income for its tax annually include in gross income as
because it is described in section year is passive income (as defined in ordinary income its pro rata share of the
501(c), 501(d), or 401(a). section 1297(b)). ordinary earnings of the QEF and as
• A state college or university 2. Asset test. At least 50% of the long-term capital gain its pro rata share
described in section 511(a)(2)(B). average percentage of assets of the net capital gain of the QEF.
• A plan described in section 403(b) or (determined under section 1297(e)) • The shareholder may elect to extend
457(b). held by the foreign corporation during the time for payment of tax on its share
• An individual retirement plan or the tax year are assets that produce of the undistributed earnings of the QEF
annuity as defined in section 7701(a) passive income or that are held for the (Election B) until the QEF election is
(37). production of passive income. terminated.
• A qualified tuition program described • If the QEF election is not made with
in section 529 or 530. Basis for measuring assets. When respect to the first year of the
• A qualified ABLE program described determining PFIC status using the asset shareholder’s holding period in the
in section 529A. test, a foreign corporation may use PFIC, the shareholder may be able to
adjusted basis if: make a deemed sale election (Election
Interest holder of pass-through enti- D) or deemed dividend election
ties. In general, the following interest 1. The corporation is not publicly
holders must file Form 8621, unless an traded for the tax year; and (Election E) (if eligible). If the
shareholder properly makes a deemed
exception applies. 2. The corporation (a) is a controlled sale election or deemed dividend
1. A U.S. person that is an interest foreign corporation within the meaning election in connection with its QEF
holder of a foreign pass-through entity of section 957 (CFC), or (b) makes an election, then the PFIC will become a
that is a direct or indirect shareholder of election to use adjusted basis. pedigreed QEF (as defined in
a PFIC. Publicly traded corporations must Regulations section 1.1291-9(j)(2)(ii))
2. A U.S. person that is considered use fair market value when determining with respect to the shareholder.
(under sections 671 through 679) the PFIC status using the asset test.
shareholder of PFIC stock held in trust. Note. A shareholder that receives a
Look-thru rule. When determining if a distribution from an unpedigreed QEF
3. A U.S. partnership, S corporation, foreign corporation is a PFIC, the (defined in Regulations section
U.S. trust (other than a trust that is foreign corporation is treated as if it 1.1291-9(j)(2)(iii)) is also subject to the
subject to sections 671 through 679 for directly held its proportionate share of rules applicable to a shareholder of a
the PFIC stock), or U.S. estate that is a the assets and directly received its section 1291 fund, later.
direct or indirect shareholder of a PFIC. proportionate share of the income of
any corporation in which it owns at least Basis adjustments. A shareholder's
Note. U.S. persons that are interest 25% of the stock (by value). basis in the stock of a QEF, or in any
holders of pass-through entities property through which the shareholder
described in 3 above must file Form CFC overlap rule. A 10% or more U.S. is treated as owning stock of a QEF, is
8621 if the pass-through entity fails to shareholder (defined in section 951(b)) increased by the earnings included in
file such form or the U.S. person is that includes in income its pro rata share gross income and decreased by a
required to recognize any income under of subpart F income for stock of a CFC distribution from the QEF to the extent
section 1291. that is also a PFIC will not generally be of previously taxed amounts.
subject to the PFIC provisions for the
same stock during the qualified portion
of the shareholder's holding period of

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Section 1291 Fund organization, the rules of section 1291 b. The excess, if any, of the amount
A PFIC is a section 1291 fund if: will apply only if a dividend from the of mark-to-market gain included in the
PFIC would be taxable to the gross income of the PFIC shareholder
1. The shareholder did not elect to shareholder under subchapter F. for prior tax years over the amount
treat the PFIC as a QEF or make a allowed such PFIC shareholder as a
mark-to-market election with respect to Coordination of mark-to-market re-
deduction for a loss with respect to such
the PFIC, or gimes with section 1291.
stock for prior tax years.
Shareholders of a PFIC that is marked
2. The PFIC is an unpedigreed QEF
to market under section 1296 or any
(as defined in Regulations section See the instructions for Part II,
other Code provision may be subject to
1.1291-9(j)(2)(iii)). Election C, and Part IV, later, for more
section 1291 in the first tax year in information, including special rules that
which the shareholder marks to market may apply in the year that a mark-to-
Tax Consequences for the PFIC stock. See Regulations market election is made.
Shareholders of a Section 1291 sections 1.1291-1(c)(4) and 1.1296-1(i).
Basis adjustment. If the stock is held
Fund Mark-to-Market Election directly, the shareholder's adjusted
Shareholders of a section 1291 fund are A U.S. shareholder of a PFIC may elect basis in the PFIC stock is increased by
subject to special rules when they to mark to market the PFIC stock under the amount included in income and
receive an excess distribution (defined section 1296 if the stock is “marketable decreased by any deductions allowed. If
below) from, or recognize gain on the stock.” See the instructions for Election the stock is owned indirectly through
sale or disposition of the stock of, a C, later, for information on making this foreign entities, see Regulations section
section 1291 fund. A distribution may be election. 1.1296-1(d)(2).
partly or wholly an excess distribution.
The entire amount of gain from the Marketable stock. Marketable stock
disposition of a section 1291 fund is is: Additional Information
treated as an excess distribution. • PFIC stock that is regularly traded (as Required
defined in Regulations section Reportable transaction disclosure
Excess distributions. An excess 1.1296-2(b)) on: statement. A 10% shareholder (by
distribution is the part of the distribution
received from a section 1291 fund in the 1. A national securities exchange vote or value) of a QEF may also be
current tax year that is greater than that is registered with the Securities and required to file Form 8886 if the QEF is
125% of the average distributions Exchange Commission (SEC), considered to have participated in a
received in respect of such stock by the 2. The national market system reportable transaction pursuant to
shareholder during the 3 preceding tax established under section 11A of the Regulations section 1.6011-4(c)(3)(i)
years (or, if shorter, the portion of the Securities Exchange Act of 1934, or (G). See Form 8886, Reportable
shareholder's holding period before the 3. A foreign securities exchange Transaction Disclosure Statement, and
current tax year). No part of a that is regulated or supervised by a Regulations section 1.6011-4 for
distribution received or deemed governmental authority of the country in additional information.
received during the first tax year of the which the market is located and has the
shareholder's holding period of the characteristics described in Regulations Specific Instructions
stock will be treated as an excess section 1.1296-2(c)(1)(ii).
distribution. • Stock in certain PFICs described in Important: All line references to Form
The excess distribution is determined Regulations section 1.1296-2(d). 1120 and Form 1040 are to the 2021
forms. Other entities should use the
on a per share basis and is allocated to For additional information, including
comparable line on their tax return.
each day in the shareholder's holding special rules for regulated investment
period of the stock. See section 1291(b) companies (RICs) that own PFIC stock,
(3) for adjustments that are made when see Regulations section 1.1296-1 and Excepted Specified
determining if a distribution is an excess 1.1296-2. Foreign Financial Assets
distribution.
Reported
Portions of an excess distribution are Tax Consequences Check this box only if the Form 8621
treated differently. The portions
allocated to the days in the current tax After a PFIC shareholder elects to mark filer also files Form 8938, Statement of
year and the shareholder's tax years in the stock to market under section 1296, Specified Foreign Financial Assets, for
its holding period before the foreign the shareholder either: the tax year and includes this form in the
total number of Forms 8621 reported on
corporation qualified as a PFIC 1. Includes in income each year an
line 4 of Part IV, Excepted Specified
(pre-PFIC years) are taxed as ordinary amount equal to the excess, if any, of
Foreign Financial Assets, of Form 8938.
income. The portions allocated to the the fair market value of the PFIC stock
For more information, see the
days in the shareholder's tax years as of the close of the tax year over the
Instructions for Form 8938, generally,
(other than the current tax year) in its shareholder's adjusted basis in such
and in particular, Duplicative Reporting
holding period when the foreign stock; or
and the specific instructions for Part IV,
corporation was a PFIC are not included 2. Is allowed a deduction equal to Excepted Specified Foreign Financial
in income, but are subject to the the lesser of: Assets.
separate tax and interest charge set
forth in section 1291(c). a. The excess, if any, of the
adjusted basis of the PFIC stock over its
See the instructions for Part V, later. fair market value as of the close of the
Exempt organizations. If a tax year; or
shareholder of a PFIC is a tax-exempt

Instructions for Form 8621 (Rev. 01-2022) -3-

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Election To Be Treated as a publicly available statement (such as (including stock owned indirectly) has a
in a public filing, disclosure statement, value of $25,000 or less ($50,000 or
a Qualifying Insurance or other notice provided to U.S. persons less in the case of a joint return) on the
Corporation that are shareholders of the foreign last day of the U.S. person's tax year
Who may make the election. A U.S. corporation) that it satisfied the and on any day during the tax year on
person that is a shareholder (or holds an requirements of section 1297(f)(2) and which the U.S. person disposes of stock
option to purchase stock) of a Regulations section 1.1297-4(d)(1) of the foreign corporation; and
corporation that fails to qualify as a during the foreign corporation's • If the U.S. person owns stock of the
qualifying insurance corporation (QIC) applicable reporting period (as defined foreign corporation indirectly through a
(as defined in section 1297(f)(1)) solely in Regulations section 1.1297-4(f)(4)). domestic partnership, domestic trust,
because its applicable insurance This publicly available statement must domestic estate, or S corporation (a
liabilities make up 25% or less of its total include the same three items noted in domestic pass-through entity), the stock
assets may elect to treat the stock as the first bulleted item above. However, a of the foreign corporation that is owned
stock of a qualifying insurance U.S. shareholder may not rely upon the by the domestic pass-through entity has
corporation under the alternative facts foreign corporation’s statement a value of $25,000 or less on the last
and circumstances test set forth in described in this bullet if the U.S. person day of the tax year of the domestic
section 1297(f)(2) and Regulations knows or has reason to know based pass-through entity that ends with or
section 1.1297-4(d) if: upon reasonably accessible information within the U.S. person's tax year and on
that the statement was incorrect. any day during the tax year of the
1. The foreign corporation’s domestic pass-through entity on which it
applicable insurance liabilities make up Note. The final regulations do not disposes of stock of the foreign
at least 10% of its total assets; and require the U.S. person to attach a copy corporation.
2. Based on the applicable facts of either of the above statements to For these purposes, stock is publicly
and circumstances, the foreign Form 8621. See Regulations section traded if it would be treated as
corporation is predominantly engaged in 1.1297-4(d)(5). marketable stock within the meaning of
an insurance business, and its failure to When to make the election. section 1296(e) and Regulations
satisfy the 25% threshold is due solely Generally, the U.S. shareholder must section 1.1296-2 (without regard to
to runoff-related or rating-related make this election by the due date, Regulations section 1.1296-2(d)) if the
circumstances involving such insurance including extensions, of the U.S. election under section 1297(f)(2) is not
business. person’s tax return for the tax year for made.
The U.S. shareholder may make the which the taxpayer is relying on the
election under section 1297(f)(2) for its alternative facts and circumstances test Address and Identifying
tax year if: within the meaning of section 1297(f)(2) Number
• The foreign corporation directly and Regulations section 1.1297-4(d) to
provides the U.S. shareholder a meet the definition of a qualifying Address. Include the suite, room, or
statement, signed by a responsible insurance corporation. A U.S. person other unit number after the street
officer of the foreign corporation or an can attach the Form 8621 to an address. If the post office does not
authorized representative of the foreign amended return for the tax year of the deliver mail to the street address and
corporation, that the foreign corporation U.S. person to which the election relates the shareholder has a P.O. box, enter
satisfied the requirements of section if the U.S. person can demonstrate that the box number instead.
1297(f)(2) and Regulations section the reason for not filing the form with its Identifying number. Individuals
1.1297-4(d)(1) during the foreign original return was due to reasonable should enter a social security number or
corporation's applicable reporting period cause. a taxpayer identification number issued
(as defined in Regulations section How to make the election. Follow by the IRS. All other entities should
1.1297-4(f)(4)). Specifically, if the these steps to make the election. enter an employer identification number
foreign corporation failed to qualify as a (EIN).
QIC under section 1297(f)(1) solely 1. Check the box on page 1 of Form
because the ratio of applicable 8621. Reference ID number. A reference ID
insurance liabilities to total assets for 2. Provide the identifying number is required in the applicable
the tax year is 25% or less, the information for the U.S. person and the entry space above Part I of the form only
statement must (1) indicate that the ratio foreign corporation (Name, Address, in cases where no EIN was entered for
was at least 10%, along with a Identifying Number (if any)) only. You do the PFIC, QEF, or QIC. However, filers
calculation of the ratio (with the resultant not have to complete any other part of are permitted to enter both an EIN and a
ratio double underlined); (2) include a the Form 8621 if you are only filing the reference ID number. If applicable, enter
statement indicating whether the failure form to make this election. the reference ID number (defined
below) you have assigned to the PFIC,
to satisfy the 25% test was the result of Deemed election for publicly QEF, or QIC.
runoff-related or rating-related traded companies. A U.S. person who
A “reference ID number” is a number
circumstances, along with a brief owns publicly traded stock in a foreign
established by or on behalf of the U.S.
description of those circumstances; and corporation will be deemed to make the
person identified at the top of page 1 of
(3) include information that establishes election under section 1297(f)(2) with
the form that is assigned to a PFIC,
that the foreign corporation has met the respect to the foreign corporation and
QEF, or QIC with respect to which Form
“predominantly engaged in an insurance its subsidiaries if the following
8621 reporting is required. These
business” requirement described in requirements are satisfied.
numbers are used to uniquely identify
Regulations section 1.1297-4(d)(2). The stock of the foreign corporation
• the PFIC, QEF, or QIC in order to keep
• The foreign corporation (or its foreign that is owned by the U.S. person
parent corporation on its behalf) makes track of the entity from tax year to tax

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year. The reference ID number must the reference ID number, but must enter • Is treated as receiving an excess
meet the requirements set forth below. at least the EIN. distribution from the PFIC;
You must correlate the reference ID • Is treated as recognizing gain that is
Note. Because reference ID numbers numbers as follows: New reference ID treated as an excess distribution as a
are established by or on the behalf of a number [space] Old reference ID result of a disposition of the PFIC;
U.S. person filing Form 8621, there is no number. If there is more than one old • Is required to include an amount in
need to apply to the IRS to request a reference ID number, you must enter a income under section 1293(a) with
reference ID number or for permission space between each such number. As respect to the PFIC, unless another
to use these numbers. indicated above, the length of a given shareholder through which the indirect
Note. In general, the reference ID reference ID number is limited to 50 shareholder owns the PFIC files under
number assigned to a PFIC, QEF, or characters and each number must be section 1298(f) with respect to the PFIC
QIC on Form 8621 has relevance only alphanumeric and no special characters and no other exception applies;
to Form 8621 and should not be used are permitted. • Is required to include an amount in
income under section 1296(a) with
with respect to the PFIC, QEF, or QIC Note. This correlation requirement respect to the PFIC, unless another
on other IRS forms. applies only to the first year the new shareholder through which the indirect
Requirements. The reference ID reference ID number is used. shareholder owns the PFIC files under
number must be alphanumeric (defined section 1298(f) with respect to the PFIC;
below), and no special characters or or
spaces are permitted. The length of a Part I. Summary of Annual • Is required to report the status of a
given reference ID number is limited to Information section 1294 election with respect to the
50 characters. PFIC.
Who Must Complete Part I
For these purposes, the term See Regulations section 1.1298-1(b)
“alphanumeric” means the entry can be In general, all shareholders required to (2) for further information.
alphabetical, numeric, or any file Form 8621 under section 1298(f)
combination of the two. and the regulations thereunder must Domestic grantor trusts. In general,
complete Part I. However, a shareholder a U.S. grantor of a domestic grantor
The same reference ID number must of a PFIC that is marked to market trust that owns an interest in a PFIC
be used consistently from tax year to tax under a Code provision other than (directly or indirectly) through one or
year with respect to a given PFIC, QEF, section 1296 (such as section 475) is more foreign entities must complete
or QIC. If for any reason a reference ID not required to complete Part I unless it Part I with respect to that PFIC interest.
number falls out of use (for example, the is subject to section 1291 with respect See Regulations sections 1.1291-1(b)
PFIC, QEF, or QIC no longer exists due to the PFIC pursuant to Regulations (8)(iii)(D) and 1.1298-1(b)(1)(iii). In
to disposition or liquidation), the section 1.1291-1(c)(4)(ii). See T.D. those circumstances, a domestic
reference ID number used for that PFIC, 9806. grantor trust is not required to complete
QEF, or QIC cannot be used again for Part I with respect to the stock of the
another PFIC, QEF, or QIC for purposes Shareholders filing a joint return may PFIC that is owned by the grantor. For
of Form 8621 reporting. file a single Form 8621 with respect to a certain exceptions, see Regulations
There are some situations that single PFIC in which each joint filer section 1.1298-1(b)(3)(i).
warrant correlation of a new reference owns an interest.
Exceptions to Filing Part I
ID number with a previous reference ID Shareholders that are the first U.S.
A shareholder is exempt from
number when assigning a new person in the chain of ownership.
completing Part I if it meets one of the
reference ID number to a PFIC, QEF, or Regulations section 1.1298-1 generally
exceptions described below.
QIC. For example: requires a U.S. person that is at the
• In the case of a merger or acquisition, lowest tier in a chain of ownership (that Special rules for estates and trusts.
a Form 8621 filer must use a reference is, the first U.S. person in the chain of Certain U.S. grantors and beneficiaries
ID number that correlates the previous ownership) and that is a shareholder of estates and trusts may qualify for an
reference ID number with the new (including an indirect shareholder) of a exception to filing Part I.
reference ID number assigned to the PFIC to complete Part I for each PFIC • A U.S. grantor of a domestic grantor
PFIC, QEF, or QIC. owned by that shareholder during the trust is not required to complete Part I if
• In the case of an entity classification shareholder’s tax year. the trust is a domestic liquidating trust or
election that is made on behalf of a Specific filing requirements apply a widely held fixed investment trust, as
PFIC, QEF, or QIC on Form 8832, with respect to domestic grantor trusts, described in Regulations section
Regulations section 301.6109-1(b)(2)(v) as described further in these 1.1298-1(b)(3)(i). In these
requires the PFIC, QEF, or QIC to have Instructions. circumstances, the domestic grantor
an EIN for this election. For the first year trust is required to complete Part I.
that Form 8621 is filed after an entity Exceptions to these filing In certain situations, a shareholder
•
classification election is made on behalf requirements are described below who is a member or beneficiary of (or
of the PFIC, QEF, or QIC on Form 8832, under Exceptions to Filing Part I. participant in) an arrangement treated
the new EIN must be entered in the Shareholders that are not the first as a foreign pension fund under a U.S.
applicable entry space above Part I of U.S. person in the chain of owner- income tax treaty that owns an interest
Form 8621 and the old reference ID ship. In general, an indirect in a PFIC is not required to complete
number must be entered in the shareholder that is not the first U.S. Part I with respect to the PFIC. See
applicable entry space just below. In person in the chain of ownership is not Regulations section 1.1298-1(c)(4).
subsequent years, the Form 8621 filer required to complete Part I unless the • A U.S. beneficiary of a foreign
may continue to enter both the EIN and indirect shareholder: nongrantor trust or foreign estate is not

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required to complete Part I with respect Line Instructions The entity will include the QEF earnings
to the stock of the PFIC that is owned by as income for the year in which the
the trust or estate unless it has made a Line 1. Describe each class of shares PFIC's tax year ends. The interest
QEF or section 1296 mark-to-market held by the shareholder. holder in the pass-through entity takes
election, received an excess Line 2. Provide the date during the tax the income into account under the rules
distribution, or recognized gain treated year that the shares were acquired, if applicable to inclusions of income from
as an excess distribution with respect to applicable. the pass-through entity.
the stock of the PFIC. See Regulations
section 1.1298-1(b)(3)(ii). Line 3. List the number of shares held Affiliated groups. The common parent
at the end of the tax year. of an affiliated group of corporations that
Exempt organizations. In general, if joins in filing a consolidated income tax
a shareholder of a PFIC is a tax-exempt Line 4. Indicate the value of the shares return makes the QEF election for all
organization, the shareholder is held at the end of the tax year. members of the affiliated group that are
required to complete Part I only if Shareholders may rely upon periodic shareholders in the PFIC. An election by
income derived with respect to the PFIC account statements provided at least a common parent is effective for all
stock would be taxable to the annually to determine the value of a members of the group that own stock in
shareholder under subchapter F. See PFIC unless the shareholder has actual the PFIC at the time the election is
Regulations section 1.1298-1(c)(1). knowledge or reason to know based on made or any time thereafter.
readily accessible information that the
Exception if aggregate value of statements do not reflect a reasonable
For more information on who may
shareholder’s PFIC stock is $25,000 estimate of the PFIC’s value.
or less. A shareholder is not required make the election, see Regulations
to complete Part I with respect to a Line 5. Indicate the type of PFIC and section 1.1295-1(d).
specific section 1291 fund if the the amount of any excess distribution or
shareholder meets the $25,000 gain treated as an excess distribution When To Make the Election
exception on the last day of the under section 1291, inclusion under
shareholder’s tax year and the section 1293, and inclusion or Generally, a shareholder must make the
shareholder does not receive an excess deduction under section 1296. election to be treated as a QEF by the
due date, including extensions, for filing
distribution from, or recognize gain on Note. In cases in which a shareholder’s the shareholder's income tax return for
the sale or disposition of the stock of, ownership interest in a PFIC is not the first tax year to which the election
the section 1291 fund. For purposes of denominated in shares, the shareholder will apply (the “election due date”). See
determining whether a shareholder must provide the information for lines 1 Retroactive election below for
satisfies the $25,000 threshold, the through 4 based on its form of exceptions. The foreign corporation will
shareholder takes into account all PFIC ownership in the PFIC. be treated as a QEF with respect to the
stock (QEFs, section 1291 funds, and shareholder for the tax year in which the
PFIC stock subject to a section 1296 election is made and for each
mark-to-market election) owned directly Part II. Elections subsequent tax year of the foreign
or indirectly other than PFIC stock corporation ending with or within a tax
owned through another U.S. person or A. Election To Treat the PFIC as year of the shareholder for which the
PFIC stock owned through another a QEF (Section 1295 Election) election is effective.
PFIC. Shareholders filing a joint return
have a combined threshold of $50,000 Who May Make the Election Retroactive election. A shareholder
instead of $25,000 for purposes of this Generally, a U.S. person that owns may make a QEF election for a tax year
exception. stock in a PFIC, directly or indirectly, after the election due date (a retroactive
For more information, see may make Election A to treat the PFIC election) only if:
Regulations section 1.1298-1(c)(2). as a QEF. • The shareholder has preserved its
right to make a retroactive election
Exception if the value of sharehold- Note. A separate election must be under the protective statement regime
er’s indirect PFIC stock is $5,000 or made for each PFIC that the (described below), or
less. A shareholder is not required to shareholder wants to treat as a QEF. • The shareholder obtains the
complete Part I with respect to indirect permission of the IRS to make a
Exception. A tax-exempt organization
ownership of a specific section 1291 retroactive election under the consent
that is not taxable under section 1291
fund if the shareholder meets the regime (described later).
may not make the election. In addition, a
$5,000 exception with respect to the
tax-exempt organization that is not
section 1291 fund on the last day of the Protective statement regime.
taxable under section 1291 is not
shareholder’s tax year and the Under the protective statement regime,
subject to a QEF election made by a
shareholder does not receive an excess a shareholder may preserve the ability
pass-through entity.
distribution from, or recognize gain on to make a retroactive election if the
the sale or disposition of the stock of, Chain of ownership. In a chain of shareholder:
the section 1291 fund. For purposes of ownership, only the first U.S. person 1. Reasonably believed, as of the
determining whether a shareholder that is a direct or indirect shareholder of due date for making the QEF election,
satisfies the $5,000 threshold, the the PFIC may make the election. that the foreign corporation was not a
PFIC for its tax year that ended during
shareholder takes into account only the Pass-through entities. A QEF that year (retroactive election year);
value of the shareholder’s proportionate election made by a domestic
share of the section 1291 fund. partnership, S corporation, or estate is 2. Filed a Protective Statement (see
For more information, see made in the pass-through entity's below) with respect to the foreign
Regulations section 1.1298-1(c)(2). capacity as a shareholder of a PFIC. corporation, applicable to the retroactive
election year, in which the shareholder

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describes the basis for its reasonable 3. Attach Form 8621 to a timely filed Documentation. For all tax years
belief; tax return (or, if applicable, partnership subject to the section 1295 election, the
3. Extended, in the Protective or exempt organization return). shareholder must keep copies of all
Statement, the periods of limitations on Forms 8621, attachments, and PFIC
the assessment of taxes under the PFIC For each subsequent tax year in Annual Information Statements or
rules for all tax years to which the which the election applies and the Annual Intermediary Statements. Failure
protective statement applies; and corporation is treated as a QEF, the to produce these documents at the
shareholder must:
4. Complied with the other terms request of the IRS may result in
and conditions of the protective 1. Complete the applicable lines of invalidation or termination of the section
statements. Part III, and 1295 election. See Regulations section
2. Attach Form 8621 to a timely filed 1.1295-1(f)(2)(ii). In rare and unusual
The Protective Statement must be tax return (or, if applicable, a circumstances, the IRS will consider
attached to the shareholder's tax return partnership or exempt organization requests for alternative documentation
for the shareholder's first tax year to return). to verify the ordinary earnings and net
which the statement will apply. For capital gain of the PFIC. For more
required content of the statement and information, see Regulations section
Annual Election Requirements of
other information, see Regulations 1.1295-1(g)(2).
section 1.1295-3(c). the PFIC or Intermediary
B. Election To Extend Time for
Consent regime. Under the PFIC Annual Information Statement.
consent regime, a shareholder that has For each year of the PFIC ending in a Payment of Tax
not satisfied the requirements of the tax year of a shareholder to which the Who May Make the Election
protective regime may request that the QEF election applies, the PFIC must A shareholder of a QEF may make
IRS permit a retroactive election. The provide the shareholders with a PFIC Election B to extend the time for
consent regime applies only if: Annual Information Statement. The payment of the tax on its share of the
1. The shareholder reasonably statement must contain certain undistributed earnings of the fund for
relied on tax advice of a competent and information, including: the current tax year. If a U.S.
qualified tax professional; 1. The shareholder's pro rata share partnership is a shareholder of a QEF,
2. The interest of the U.S. of the PFIC's ordinary earnings and net the election is made at the partner level.
Government will not be prejudiced if the capital gain for that tax year, or
consent is granted; 2. Sufficient information to enable Special Rules
3. The shareholder requests the shareholder to calculate its pro rata
consent before the PFIC status issue is share of the PFIC's ordinary earnings • If this election is made, interest will be
imposed on the amount of the deferred
raised on audit; and and net capital gain for that tax year.
tax. This interest must be paid on the
4. The shareholder satisfies the For other information required to be termination of the election (see the
procedural requirements under included in the PFIC Annual Information instructions for Part VI, line 24, later).
Regulations section 1.1295-3(f)(4). Statement, see Regulations section • The election cannot be made for any
1.1295-1(g). earnings on shares disposed of during
For more information on making a the tax year or for a tax year that any
retroactive election, see Regulations Annual Intermediary Statement. If portion of the shareholder's pro rata
section 1.1295-3. the shareholder holds stock in a PFIC share of the fund's earnings is included
through an intermediary, an Annual in income under section 951 (relating to
Intermediary Statement may be issued
Special Rules CFCs).
in lieu of the PFIC Annual Information
For rules relating to the invalidation, Statement. For the definition of an
termination, or revocation of a section “intermediary,” see Regulations section When To Make the Election
1295 election, see Regulations section 1.1295-1(j). For details on the Generally, this election must be made
1295-1(i). Also, see Regulations section information that should be included in by the due date, including extensions, of
1.1295-1(c)(2) for rules relating to the the Annual Intermediary Statement, see the shareholder's tax return for the tax
years to which a section 1295 election Regulations section 1.1295-1(g)(3). year for which the shareholder reports
applies. the income related to the deferred tax.
Combined statements. A PFIC that
owns directly or indirectly any shares of
How To Make the Election stock in one or more PFICs may provide How To Make the Election
For the tax year in which the section its shareholders with a PFIC Annual Take these steps to make this election.
1295 election is made, the shareholder Information Statement in which it
1. Check box B in Part II.
must do the following. combines its own required information
1. Check box A in Part II of Form and representations with the information 2. Complete lines 8a through 9c of
8621. and representations of any lower-tier Part III.
PFIC. Similarly, an intermediary through For more information on making
2. Complete the applicable lines of which a shareholder indirectly holds Election B, see Temporary Regulations
Part III. Include the information provided stock in more than one PFIC may section 1.1294-1T.
in the PFIC Annual Information provide the shareholder with a
Statement Annual Intermediary , combined Annual Intermediary See Part VI for annual reporting
Statement, or a combined statement Statement. For more information, see requirements for outstanding section
(see below) received from the PFIC. Regulations section 1.1295-1(g)(4). 1294 elections.

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C. Election To Mark to Market 1296(j) and Regulations section 1.1296- 2. Enter the gain or loss on line 15f
PFIC Stock (Section 1296 1(i). of Part V.
Election) D. Deemed Sale Election in 3. If a gain is entered, complete
line 16 to report the tax and interest due
Who May Make the Election Connection With a QEF on the excess distribution.
Generally, an election to mark to market Election
PFIC stock under section 1296 may be Who May Make the Election For more information regarding
making Election D, see Regulations
made by: This is a deemed sale election under section 1.1291-10.
• A U.S. person who owns (or is treated section 1291(d)(2)(A). This election may
as owning) marketable stock (defined be made by a U.S. person that elects to E. Deemed Dividend Election in
earlier) in a PFIC at the close of such treat a PFIC as a QEF for a foreign Connection With a QEF
person's tax year, or corporation's tax year following its first Election
• A RIC that meets the requirements of tax year as a PFIC included in the
section 1296(e)(2). shareholder's holding period (an Who May Make the Election
For more information, see section unpedigreed QEF). A shareholder This is a deemed dividend election
1296 and Regulations section 1.1296-1. making this election is deemed to have under section 1291(d)(2)(B). This
See sections 1296(f) and (g) and sold the PFIC stock as of the first day of election may be made by a U.S. person
Regulations sections 1.1296-1(e) and the PFIC's first tax year as a QEF (the that elects to treat a PFIC that is also a
(h)(1)(ii) for information regarding stock qualification date) for its fair market CFC as a QEF for the foreign
owned through certain foreign entities. value. corporation's tax year following its first
tax year as a PFIC included in the
When To Make the Election Special Rules shareholder's holding period (an
unpedigreed QEF).
This election must be made on or before For purposes of this election, the
the due date (including extensions) of following apply. A shareholder making this election is
the U.S. person's income tax return for • The gain from the deemed sale is treated as receiving a dividend equal to
the tax year in which the stock is taxed as an excess distribution received its pro rata share of the post-1986
marked to market under section 1296. A on the qualification date. earnings and profits (defined below in
section 1296 election by a CFC is made • The basis of the shareholder’s PFIC Special Rules) of the PFIC on the
by its controlling domestic shareholders stock held directly, or the stock or other qualification date (defined under the
(as defined in Regulations section property owned directly by the instructions for Election D, earlier). The
1.964-1(c)(5)). For more information, shareholder through which ownership of deemed dividend is taxed as an excess
see Regulations section 1.1296-1(h)(1) the PFIC is attributed to the distribution, allocated only to the days in
(ii). Once made, the election applies to shareholder, is increased by the gain the shareholder's holding period during
all subsequent tax years unless the recognized. The manner in which the which the foreign corporation qualified
election is revoked or terminated basis adjustment is made depends on as a PFIC. For this purpose, the
pursuant to Regulations section whether the shareholder is a direct or shareholder's holding period ends on
1.1296-1(h)(3). indirect shareholder. See Regulations the day before the qualification date.
section 1.1291-10(f).
• Solely for purposes of applying the
How To Make the Election PFIC rules, the shareholder's holding Special Rules
Take these steps to make this election. period of the stock begins on the For purposes of this election, the
1. Check box C in Part II. qualification date. following apply.
• The election may be made for stock • The term “post-1986 earnings and
2. Complete either (a) Part V to on which the shareholder will realize a profits” means the undistributed
calculate the amount due under section loss, but that loss cannot be recognized. earnings and profits of the PFIC (as of
1291 (when required, as generally In addition, there is no basis adjustment the day before the qualification date)
described in the next paragraph), or (b) for a loss. accumulated and not distributed in tax
Part IV to calculate the gain or loss on After the deemed sale, the PFIC years beginning after 1986 during which
•
the stock in all other cases. becomes a pedigreed QEF with respect the foreign corporation was a PFIC and
Coordination of Election C with sec- to the shareholder. while the shareholder held the stock
tion 1291 for first year of election. In (but without regard to whether the
general, when a shareholder makes a When To Make the Election earnings relate to a period in which the
PFIC was a CFC).
mark-to-market election for PFIC stock This election must be made by the due • The basis of the shareholder's PFIC
in a year other than the first year in date, including extensions, of the stock held directly, or the stock or other
which the shareholder holds stock in the shareholder's original tax return (or by property owned directly by the
PFIC and no QEF election is in effect, filing an amended return within 3 years shareholder through which ownership of
the PFIC stock is treated as sold at fair of the due date of the original return) for the PFIC is attributed to the
market value on the last day of the tax the tax year that includes the shareholder, is increased by the amount
year for which the election is made, and qualification date. of the deemed dividend. The manner in
the gain is treated as an excess
which the basis adjustment is made
distribution subject to section 1291. In How To Make the Election depends on whether the shareholder is
addition, any distributions made during
the year with respect to the PFIC stock Take these steps to make this election. a direct or indirect shareholder. See
Regulations section 1.1291-9(f).
are subject to section 1291. See section 1. Check box D in Part II.

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• Solely for purposes of applying the F. Deemed Sale Election With within 3 years of the due date, as
PFIC rules, the shareholder's holding Respect to a Former PFIC or extended under section 6081, of the
period begins on the qualification date. original return) for the tax year that
“Section 1297(e) PFIC” includes, as appropriate, either the
When To Make the Election Who May Make the Election termination date or qualification date.
This election must be made by the due This is a deemed sale election under However, see Form 8621-A (and
date (including extensions) of the section 1298(b)(1) and Regulations Regulations sections 1.1297-3(e) and
shareholder's original tax return (or by section 1.1297-3(b) or 1.1298-3(b). This 1.1298-3(e)) if the 3-year period has
filing an amended return within 3 years election may be made by: expired.
of the due date of the original return) for • A U.S. person that is a shareholder of
the tax year that includes the a foreign corporation that no longer How To Make the Election
qualification date. qualifies as a PFIC under either the Take these steps to make this election.
income or asset test of section 1297(a),
1. Check box F in Part II.
How To Make the Election or
• A U.S. shareholder (as defined in 2. Enter the gain or loss on line 15f
Take these steps to make this election. section 951(b)) that owns stock in a of Part V. If a gain, complete the rest of
1. Check box E in Part II. foreign corporation that is a CFC and a Part V.
2. Enter the dividend on line 15e of PFIC, but that is not treated as a PFIC
G. Deemed Dividend Election
Part V as an excess distribution. with respect to the U.S. shareholder
under section 1297(d). With Respect to a “Section
3. Complete line 16 to figure the tax 1297(e) PFIC”
and interest due on the excess Such persons may elect to treat the Who May Make the Election
distribution. stock of the foreign corporation as sold
for its fair market value on the last day of This is a deemed dividend election
Attachments. The shareholder must under section 1298(b)(1) and
the last tax year of the foreign
attach a statement to Form 8621 that Regulations section 1.1297-3(c). This
corporation in which it was treated as a
demonstrates the calculation of its pro election may be made by a shareholder
PFIC (termination date) or the first day
rata share of the post-1986 earnings that is a U.S. shareholder (as defined in
on which the qualified portion of the
and profits of the PFIC that are treated section 951(b)) of a foreign corporation
shareholder’s holding period in the
as distributed to the shareholder on the that is a CFC and a PFIC, but that is not
section 1297(e) PFIC begins
qualification date. The post-1986 treated as a PFIC with respect to the
(qualification date), as applicable.
earnings and profits may be reduced U.S. shareholder under section 1297(d).
(but not below zero) by the amount that
the shareholder satisfactorily Special Rules
Special Rules
demonstrates was previously included • The gain from the deemed sale is
in its income or in the income of another taxed as an excess distribution. A shareholder making this election is
U.S. person. The shareholder • The basis of the shareholder’s PFIC treated as receiving a dividend of its pro
demonstrates this by including in the stock held directly, or the stock or other rata share of the post-1986 earnings
statement mentioned above the property owned directly by the and profits (defined later in
following information: shareholder through which ownership of Attachments) of the section 1297(e)
• The name, address, and identifying the PFIC is attributed to the PFIC on the CFC qualification date (as
number of the U.S. person and the shareholder, is increased by the amount defined in Regulations section
amount that was included in income; of the excess distribution taxed to the 1.1297-3(d)). The deemed dividend is
• The tax year in which the amount was shareholder making Election F. The taxed under section 1291 as an excess
previously included in income; manner in which the basis adjustment is distribution, allocated only to the days in
• The provision of law under which the made depends on whether the the shareholder’s holding period during
amount was previously included in shareholder is a direct or indirect which the foreign corporation qualified
income; shareholder. See Regulations sections as a PFIC. For this purpose, the
• A description of the transaction in 1.1297-3(b)(5) and 1.1298-3(b)(5). shareholder’s holding period ends on
which the shareholder acquired the • Solely for purposes of applying the the day before the CFC qualification
stock of the PFIC from the other U.S. PFIC rules, the new holding period of date. After the deemed dividend
person; and the stock begins on the date after the election, the shareholder’s stock is not
• The provision of law under which the termination date or on the qualification treated as stock in a PFIC.
shareholder's holding period includes date, as applicable.
the holding period of the other U.S. • Election F may be made for stock on For purposes of this election, the
person. which there would be a loss, but the loss following rules apply:
is not recognized. • The basis of the shareholder’s PFIC
stock held directly, or the stock or other
For more information on making For more information on making this property owned directly by the
Election E, see Regulations section election, see Regulations sections shareholder through which ownership of
1.1291-9. 1.1297-3(b) (section 1297(e) PFIC) and the PFIC is attributed to the
1.1298-3(b) (former PFIC). shareholder, is increased by the amount
of the deemed dividend. The manner in
When To Make the Election which the basis adjustment is made
This election must be made by the due depends on whether the shareholder is
date of the shareholder’s original tax a direct or indirect shareholder (as
return (or by filing an amended return

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defined earlier). See Regulations The post-1986 earnings and profits the PFIC is attributed to the
section 1.1297-3(c)(6). may be reduced (but not below zero) by shareholder, is increased by the amount
• Solely for purposes of applying the the amount that the shareholder of the deemed dividend. The manner in
PFIC rules, the shareholder’s new satisfactorily shows was previously which the basis adjustment is made
holding period begins on the CFC included in its income or in the income depends on whether the shareholder is
qualification date. of another U.S. person. The shareholder a direct or indirect shareholder (as
shows this by including in the statement defined earlier). See Regulations
When To Make the Election mentioned above the following section 1.1298-3(c)(6).
information: • Solely for purposes of applying the
Make this election by the due date of The name, address, and identifying PFIC rules, the shareholder’s new
•
the shareholder’s original return (or by number of the U.S. person and the holding period begins on the day
filing an amended return within 3 years amount that was included in income. following the termination date.
of the due date, as extended under A description of the transaction in
•
section 6081, of the original return) for which the shareholder acquired the When To Make the Election
the tax year that includes the first day on stock of the Section 1297(e) PFIC from
which the qualified portion of the the other U.S. person. This election must be made by the due
shareholder’s holding period in the PFIC The tax year in which the amount was date of the shareholder’s original return
•
begins, as determined under section previously included in income. (or by filing an amended return within 3
1297(d). However, see Form 8621-A The provision of law under which the years of the due date, as extended
•
(and Regulations section 1.1297-3(e)) if shareholder's holding period includes under section 6081, of the original
the 3-year period has expired. the holding period of the other U.S. return) for the tax year that includes the
person. first day on which the qualified portion of
How To Make the Election the shareholder’s holding period in the
PFIC begins, as determined under
Take these steps to make this election. For more information on making
section 1297(d). However, see Form
1. Check box G in Part II. Election G, see Regulations section
8621-A (and Regulations section
1.1297-3(c).
2. Enter the excess distribution on 1.1298-3(e)) if the 3-year period has
line 15e of Part V. H. Deemed Dividend Election expired.
3. If the excess distribution is With Respect to a Former PFIC
How To Make the Election
greater than zero, complete line 16 to Who May Make the Election
figure the tax and interest due on the Take these steps to make this election.
excess distribution. This is a deemed dividend election
under section 1298(b)(1) and 1. Check box H in Part II.
4. Attach to Form 8621 the Regulations section 1.1298-3(c). This 2. Enter the excess distribution on
information specified below. election may be made by a shareholder line 15e of Part V.
of a foreign corporation that no longer 3. If the excess distribution is
Attachments qualifies as a PFIC under either the greater than zero, complete line 16 to
The shareholder must attach a income or asset test of section 1297(a) figure the tax and interest due on the
statement to Form 8621 that shows the if the foreign corporation was a CFC excess distribution.
calculation of its pro rata share of the during its last tax year as a PFIC.
4. Attach to Form 8621 the
post-1986 earnings and profits of the information specified below.
section 1297(e) PFIC (as defined in Special Rules
Regulations section 1.1291-9(j)(2)(v)) A shareholder making this election is Attachments
that is treated as distributed to the treated as receiving a dividend of its pro
shareholder on the CFC qualification rata share of the post-1986 earnings The shareholder must attach a
date. and profits (defined later in statement to Form 8621 that shows the
• The CFC qualification date, as Attachments) of the former PFIC on the calculation of its pro rata share of the
defined in Regulations section termination date (as defined in post-1986 earnings and profits of the
1.1297-3(d), for the Section 1297(e) Regulations section 1.1298-3(d)). The former PFIC that is treated as
PFIC. deemed dividend is taxed under section distributed to the shareholder on the
• The beginning and ending dates of 1291 as an excess distribution, termination date.
the tax year of the shareholder in which allocated only to the days in the • The termination date, as defined in
the CFC qualification date falls (that is, shareholder’s holding period during Regulations section 1.1298-3(d), for the
the election year). which the foreign corporation qualified former PFIC.
• The shareholder’s pro rata share of as a PFIC. For this purpose, the • The beginning and ending dates of
the post-1986 earnings and profits of shareholder’s holding period ends on the tax year of the shareholder in which
the Section 1297(e) PFIC that is treated the termination date. After the deemed the termination date falls (that is, the
as distributed to the shareholder on the dividend election, the shareholder’s election year).
CFC qualification date, including a stock is not treated as stock in a PFIC. • The shareholder’s pro rata share of
schedule that shows the calculation of the post-1986 earnings and profits of
this amount as required under the former PFIC that is treated as
Regulations section 1.1297-3(c)(5)(ii). For purposes of this election, the distributed to the shareholder on the
In addition, if the shareholder filed a following rules apply: termination date, including a schedule
Form 5471 for the Section 1297(e) PFIC • The basis of the shareholder’s PFIC that shows the calculation of this
for the election year, attach Schedule J stock held directly, or the stock or other amount as required under Regulations
(Form 5471). property owned directly by the section 1.1298-3(c)(5)(ii). In addition, if
shareholder through which ownership of

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the shareholder filed a Form 5471 for Lines 6b and 7b. Your share of the For this purpose, “undistributed
the former PFIC for the election year, ordinary earnings and net capital gain of earnings” is the excess, if any, of the
attach Schedule J (Form 5471). the QEF is reduced by the amounts you amount included in gross income under
include in income under section 951 for section 1293(a) over the sum of the
The post-1986 earnings and profits the tax year with respect to the QEF. amount of any distribution and the
may be reduced (but not below zero) by Your share of these amounts may also portion of the amount attributable to
the amount that the shareholder be reduced as provided in section stock in the QEF that you transferred or
satisfactorily shows was previously 1293(g). otherwise disposed of before the end of
included in its income or in the income the QEF's tax year.
of another U.S. person. The shareholder Line 6c. This amount is treated as
shows this by including in the statement ordinary income on your tax return. Line 9b. Calculate your total tax as if
your total taxable income did not include
mentioned above the following For a noncorporate taxpayer, include your share of the undistributed earnings
information. this amount as “other income” on of the QEF (line 8e). Enter this amount
• The name, address, and identifying Schedule 1 (Form 1040), line 8z, or on on line 9b.
number of the U.S. person and the the comparable line of other
amount that was included in income. noncorporate tax returns. For a Line 9c. For corporations, enter this
• The tax year in which the amount was corporate taxpayer, include this amount deferred tax on Form 1120, Schedule J,
previously included in income. as “other income” on line 10 of Form in brackets to the left of the entry space
• The provision of law under which the 1120, or on the comparable line of other for line 11. Subtract this deferred tax
amount was previously included in corporate tax returns. amount from the sum of lines 7, 8, and
income. 10, and enter the difference on line 11.
• A description of the transaction in Line 7c. See the instructions for the
which the shareholder acquired the Schedule D used for your tax return. For individuals, enter this deferred
stock of the former PFIC from the other Portions of the net capital gain may tax on Form 1040 in brackets to the left
U.S. person. have to be reported on different lines of of the entry space for line 24. Subtract
• The provision of law under which the Schedule D, depending upon the this deferred tax amount from the sum
shareholder’s holding period includes information provided by the QEF of lines 22 and 23, and enter the
the holding period of the other U.S. concerning the section 1(h) categories difference on line 24.
person. of net capital gains and amounts
thereof, derived by the QEF. See
Part IV. Gain or (Loss)
For more information on making Regulations section 1.1293-1(a)(2) for
Election H, see Regulations section three options a QEF may use to report From a Section 1296
1.1298-3(c). and calculate capital gain. Mark-to-Market Election
Line 8 A shareholder that has made a
mark-to-market election under section
Part III. Income From a If you receive a distribution from the 1296 with respect to PFIC stock
QEF during the current tax year, the completes lines 10a through 12 with
QEF distribution is first treated as a respect to PFIC stock that the
For any tax year in which the foreign distribution out of the earnings and shareholder holds at the close of its tax
corporation is not treated as a QEF profits of the QEF accumulated during year, and lines 13a through 14c, with
because it is not a PFIC under section the year. If the total amount distributed respect to PFIC stock that it sold or
1297(a), the shareholder is not required (line 8b) exceeds the amount included disposed of during its tax year.
to complete Part III. However, the in income (line 8a), the excess is treated
section 1295 election is not terminated. as distributed out of the most recently As discussed earlier in
If the foreign corporation is treated as a accumulated earnings and profits. This Mark-to-Market Election, a shareholder
PFIC in any subsequent tax year, the amount is not taxable to you if you can may be required to complete Part V,
original election continues to apply and satisfactorily demonstrate that the rather than Part IV, in the first year in
the shareholder must include in Part III excess was previously included in your which a mark-to-market election is
its pro rata share of ordinary earnings income or the income of another U.S. made. See section 1296(j) and
and net capital gain and must also person. This is demonstrated by Regulations sections 1.1291-1(c)(4) and
comply with the section 1295 annual attaching a statement to Form 8621 that 1.1296-1(i).
reporting requirements. includes the information listed under
All QEF shareholders complete lines Attachments for Election E, earlier. If the Lines 10a Through 12
6a through 7c. If you are making excess has not been previously If the fair market value of the PFIC stock
Election B, also complete lines 8a included in your income or the income as of the close of the tax year is more
through 9c. of another U.S. person, then the excess than the U.S. person's adjusted basis in
is subject to tax according to the rules of the stock, the excess is treated as
Lines 6 and 7 section 301(c). ordinary income.
Lines 6a and 7a. Enter on lines 6a and Line 9 If the adjusted basis of the stock is
7a, respectively, your pro rata share of more than the fair market value as of the
the ordinary earnings and net capital Line 9a. Enter the total tax on your total close of the tax year, the excess is
gain of the QEF. The PFIC should taxable income (including your share of allowed as a deduction, but only to the
provide these amounts or information undistributed earnings of the QEF) for extent of, the lesser of:
that will help you determine your pro the tax year (for example, from Form
1. The amount of the excess
rata share. See Annual Election 1120, Schedule J, line 11; or Form
(line 10c), or
Requirements of the PFIC or 1040, line 24).
Intermediary, earlier.

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2. The Unreversed inclusions lines 14a and 14b, and, if applicable, has the same holding period
(defined below) with respect to such line 14c. (“applicable stock”). If you dispose of
stock (line 11). stock in a section 1291 fund for which
Line 14a. Enter any Unreversed
you have different holding periods,
This amount is treated as an ordinary inclusions with respect to the stock (see
complete line 15f for each block of
loss and as a deduction allowable in definition, earlier).
shares that has the same holding
computing adjusted gross income. Line 14b. Enter the loss from line 13c, period.
Unreversed inclusions. Unreversed but only to the extent of unreversed
inclusions are the excess of the inclusions on line 14a. This loss is Line 15
amounts that were included in income treated as ordinary loss. Corporations Lines 15a and 15b
under the section 1296 mark-to-market and individuals should include the loss
Enter your total distributions from the
rules for prior tax years over the on the “other income” line of their tax
section 1291 fund with respect to the
amounts allowed as a deduction under returns. Other entities should include
applicable stock for the periods
the section 1296 mark-to-market rules this amount on the comparable line of
indicated.
for prior tax years. See section 1296(d) their tax return.
and Regulations section 1.1296-1(a)(3). Line 14c. Enter the amount by which Note. A 10%-or-greater domestic
Lines 10c and 12. Corporations and the loss on line 13c is more than the corporation shareholder might be able
individuals should include the gain or unreversed inclusions. This amount is to claim a deemed paid foreign tax
(loss) on the “other income” line of their subject to the rules generally applicable credit under section 902 with respect to
tax returns. Other entities should include to losses provided elsewhere in the a distribution from a section 1291 fund
this amount on the comparable line of Code and regulations thereunder. See in the fund’s tax year beginning before
their tax return. However, RICs, for Regulations section 1.1296-1(c)(4)(ii). January 1, 2018. See Form 1118,
Foreign Tax Credits—Corporations, to
purposes of section 851(b), should treat Multiple dispositions. In the case of calculate the taxes deemed paid and
amounts included in income as a multiple dispositions, attach a statement the gross-up amount.
dividend. for each disposition using the same
If a CFC makes a section 1296 format shown on lines 13 through 14c. Line 15a. If the holding period of the
mark-to-market election with respect to Then: applicable stock began in the current
a PFIC in which it owns stock, any • Enter “multiple” on lines 13a, 13b, tax year, there is no excess distribution
line 10c gain is treated as foreign and 14a. and you should complete Part V as
personal holding company income and • Enter your net ordinary gains on follows: Enter on line 15a the total
any line 12 loss is treated as a line 13c (do not enter any net losses on distributions you received from the
deduction that is allocable to foreign line 13c). section 1291 fund with respect to that
personal holding company income. • Enter your net ordinary losses on stock during the current tax year. If you
line 14b. did not dispose of that stock during the
Lines 13 Through 14c tax year, do not complete the rest of
• Enter your net “other” losses on
Complete lines 13 through 14c if you line 14c. Part V. If you did dispose of that stock
sold or otherwise disposed of any during the tax year, skip lines 15b
section 1296 stock during the tax year. For more information relating to through 15e and complete lines 15f and
For purposes of lines 13 through 14c, mark-to-market elections under section 16.
“section 1296 stock” is any stock for 1296, see Regulations sections
which the taxpayer has made a 1.1296-1 and 1.1296-2. If the holding period of the applicable
stock began in the current tax year, the
mark-to-market election pursuant to line 15a amount is taxed according to
section 1296(a), which is in effect for the the rules of section 301. To the extent
tax year and for which the coordination Part V. Distributions From
rule of Regulations section 1.1296-1(i) and Dispositions of Stock that section 301(c)(1) is applicable,
include the amount as a dividend on
does not apply. of a Section 1291 Fund your income tax return. For
Line 13c. If the fair market value of the See Section 1291 Fund, earlier, for the corporations, include this line 15a
stock on the date of sale or disposition definition of a section 1291 fund and amount on Form 1120, Schedule C,
(line 13a) is more than the U.S. person's also for a brief summary of the tax line 14. For individuals, include this
adjusted basis in the stock on the date consequences for shareholders of a line 15a amount on Form 1040, line 3b
of sale or disposition (line 13b), the section 1291 fund. (and, if applicable, on Schedule B (Form
line 13c excess is a gain and is treated Also, see Section 1291 Fund and 1040), line 5).
as ordinary income. Corporations and Mark-to-Market Election, earlier, for a Line 15c. Divide the amount on
individuals should include the gain on brief discussion of when a shareholder line 15b by 3. If the number of tax years
the “other income” line of their tax may be subject to section 1291 in the in your holding period preceding the
returns. Other entities should include year that it makes a mark-to-market current tax year is less than 3, divide the
this amount on the comparable line of election under any provision of the amount on line 15b by that number.
their tax return. However, RICs, for Code, including section 1296.
purposes of section 851(b), should treat
this amount as a dividend. Complete a separate Part V for each Line 15e
excess distribution. That is, if you
If the adjusted basis of the stock receive a distribution from a section Nonexcess distribution. The
(line 13b) is more than its fair market 1291 fund with respect to shares for nonexcess distribution is the lesser of
value (line 13a), the excess is a loss which you have different holding line 15a or line 15d. This amount is
and is entered on line 13c as such. periods, complete lines 15a through 15e taxed according to the rules of section
Furthermore, the filer must complete separately for each block of shares that 301. To the extent that section 301(c)(1)

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is applicable, include the amount as a This amount is treated as ordinary The excess distribution taxes are
dividend on your income tax return. For income (for example, individuals and allocated in the same manner as the
corporations, include this amount on corporations should enter this amount excess distribution is allocated. See
Form 1120, Schedule C, line 14. For on the “other income” line of their tax Excess distributions, earlier. Those
individuals, include this amount on Form return). taxes allocated to pre-PFIC tax years
1040, line 3b (and, if applicable, on and the current tax year are taken into
Line 16c. Determine the increase in tax
Schedule B (Form 1040), line 5). account for the current tax year under
for each tax year in your holding period
the general rules of the foreign tax
Excess distributions. If you received (other than the current tax year and
credit.
more than one distribution during the tax pre-PFIC years). An increase in tax is
year with respect to the applicable determined for each PFIC year by The excess distribution taxes
stock, the excess distribution is multiplying the part of the excess allocated to a PFIC year only reduce the
apportioned among all actual distribution allocated to each year (as increase in tax figured for that tax year
distributions. Each apportioned amount determined on line 16a) by the highest (but not below zero). No carryover of
is treated as a separate excess rate of tax under section 1 or section 11, any unused excess distribution taxes is
distribution. whichever applies, in effect for that tax allowed.
year. Add the increases in tax computed
Line 15f. Gain recognized on the When you dispose of PFIC stock, the
for all years. Enter the aggregate
disposition of stock of a section 1291 above foreign tax credit rules apply only
increases in tax (before credits) on
fund is treated as an excess distribution. to the part of the gain that, without
line 16c.
Loss realized on the disposition of stock regard to section 1291, would be
of a section 1291 fund is not taken into The following table sets forth the treated under section 1248 as a
account under section 1291 and thus, highest rate of tax in effect under dividend.
for example, does not reduce the section 1 (applicable to individuals) for Line 16e. This amount is the total
amount of total gain subject to section calendar years 1987 through 2021. increase in tax and is included on your
1291. However, the loss may be tax return as additional taxes.
recognized under another provision of Tax Rates For individuals, include the amount
the Code and reported accordingly. as part of the total for Form 1040,
Stock of a section 1291 fund is Tax year(s) (based Highest rate of tax in line 16. Check box 3 on line 16 and
considered disposed of if it is sold, on calendar year effect under IRC enter “1291TAX” in the entry space for
transferred, or pledged. taxpayer) section 1 that box.
Line 16 2018–2021 37% For corporations, enter this amount
Lines 16a and 16b 2013–2017 39.6% on Form 1120, Schedule J, to the left of
Determine the taxation of the excess 2003–2012 35% the entry space for line 2. Enter “Sec.
1291” next to the amount and include it
distribution on a separate sheet and 2002 38.6% as part of the total for line 2. Other
attach it to Form 8621. Divide the 2001 39.1% entities should use the comparable line
amount on line 15e or 15f, whichever on their income tax return.
applies, by the number of days in your 1993–2000 39.6%
holding period. The holding period of 1991–1992 31% Line 16f. Interest is charged on each
net increase in tax for the period
the stock is treated as ending on the 1988–1990 28% beginning on the due date (without
date of the distribution or disposition.
1987 38.5% regard to extensions) of your income tax
Special rules apply to the holding return for the tax year to which an
period if: Line 16d. To figure the foreign tax increase in tax is attributable and ending
• The deemed dividend election credit, the shareholder of a section 1291 with the due date (without regard to
(Election E) is made. See the fund figures the total creditable foreign extensions) of your income tax return for
instructions earlier for Election E. taxes attributable to the distribution. the tax year of the excess distribution.
• The mark-to-market election (Election This amount includes the withholding The amount of interest is determined
C) is made or was made in a prior year taxes paid by the shareholder on the by using the rates and methods under
(see section 1291(a)(3)(A)(ii)). distribution and, in the case of the tax section 6621. See section 1291(c)(3) for
• The deemed dividend election with year of a section 1291 fund that begins more information regarding the
respect to a Section 1297(e) PFIC before 2018, for 10%-or-greater computation of interest, and also see
(Election G) or with respect to a Former domestic corporate shareholders, any Revenue Ruling 2021-17, 2021-37
PFIC (Election H) is made. See the taxes deemed paid under section 902. I.R.B. 362 (or successor Revenue
instructions for Election G and Election These taxes must be creditable under Ruling) for a list of historical interest
H, earlier. general foreign tax credit principles, and rates under section 6621.
the shareholder must choose to claim For individuals, include the interest
Determine the amount allocable to the foreign tax credit for the current tax on Schedule 2 (Form 1040), line 17p.
each tax year in your holding period by year.
For corporations, include the interest
adding the amounts allocated to the The excess distribution taxes (the as part of the total for Form 1120,
days in each such tax year. Add the creditable foreign taxes attributable to Schedule J, line 9g. See the instructions
amounts allocated to the pre-PFIC and an excess distribution) are determined for Form 1120, Schedule J, line 9g.
current tax years. Enter the sum on by apportioning the total creditable
line 16b. foreign taxes between the part of the
distribution that is an excess distribution
and the part that is not.

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guarantee by the QEF to or for the regard to extensions) for the year of
Part VI. Status of Prior benefit of the taxpayer may cause a termination.
Year Section 1294 deemed distribution of the earnings); When the election is terminated,
• A disposition of stock in the QEF, corporations include the deferred tax as
Elections and Termination including a pledge by the taxpayer of part of the total for Form 1120,
of Section 1294 Elections stock as security for a loan; or Schedule J, line 11. Also, enter the
Each person who has made a section • A change of status of the QEF (that deferred tax to the left of line 11 and
1294 election must (1) complete lines is, a foreign corporation that is no longer label it as “Sec. 1294 deferred tax.”
17 through 20 to annually report the a QEF or PFIC).
status of that election, and (2) complete For individuals, include the deferred
lines 21 through 24 to report the Line 22. Enter the earnings distributed tax as part of the total for Schedule 2
termination of any section 1294 election or deemed distributed as a result of the (Form 1040), line 17z. Enter “1294DT”
that occurred during the tax year. See events described on line 21. Earnings and the amount of the deferred tax in
Temporary Regulations section are treated as distributed out of the the entry space for that line.
1.1294-1T(h). most recently accumulated earnings Line 24. Enter the interest accrued on
and profits. Accordingly, an event will the deferred tax. Interest accrues
Line 17. Enter the last day of each tax first terminate the most recently made beginning on the due date (without
year for which you made a section 1294 election. regard to extensions) of your tax return
election that is outstanding. Enter as
MM/DD/YYYY. Do not include an An election may be terminated in for the tax year in which the section
election made in the current tax year. whole or in part depending on the event 1294 election is made and ending with
causing the termination. Examples are the due date (without regard to
Line 18. Enter the undistributed as follows. extensions) of your tax return for the tax
earnings of the QEF in the year for • A distribution of earnings will year of the termination. Interest is
which the payment of tax was extended terminate an election to the extent the computed using the rates and methods
by the section 1294 election entered on election is attributable to the earnings under section 6621.
line 17. If the election was partially distributed. For corporations, enter the amount of
terminated in a prior year, enter the • A loan, pledge, or guarantee by the section 1294 interest at the bottom right
remaining undistributed earnings. QEF made directly or indirectly to the margin of Form 1120, page 1, and label
Line 19. Enter the tax for which electing shareholder or related person it as “Sec. 1294 interest.” Also, include
payment was extended by the section will terminate an election to the extent of this amount in your check or money
1294 election entered on line 17. If the the undistributed earnings equal to the order payable to the United States
election was partially terminated in the amount loaned, secured, or guaranteed. Treasury. If you would otherwise receive
previous tax year, enter the balance of • A disposition of stock will terminate all a refund, reduce the refund by the
the deferred tax from line 25 of the prior elections with respect to the interest due.
year Form 8621. undistributed earnings attributable to
that stock. For individuals, include the interest
Line 20. Enter the accrued interest • A change in status of the QEF will from line 24 on Schedule 2 (Form 1040),
(determined under section 6621) on the terminate all elections. line 17q.
deferred tax. This is the interest accrued For more information, see Lines 25 and 26. Complete lines 25
from the due date (not including Regulations section 1.1294-1T(e). and 26 only if a section 1294 election is
extensions) of the return for the year for partially terminated. Enter on line 25 the
which the section 1294 election was Line 23. Enter the deferred tax due part of the deferred tax outstanding after
made until the date the current year's from the termination of the section 1294 the partial termination of the section
return is filed. election. The deferred tax entered on 1294 election. This amount should
line 19 is due if the election was equal line 19 minus line 23.
Line 21. Enter the event(s) that completely terminated. If the election
occurred during the tax year that was only partially terminated, a Note. As indicated in the line 19
terminated one or more of the section proportionate amount of the deferred instructions, for next year, be sure to
1294 elections reported on line 17. A tax is due. That amount is determined enter the line 25 amount of this year’s
section 1294 election may be by multiplying the amount entered on Form 8621 on line 19 of next year’s
terminated voluntarily. However, an line 19 by a fraction, of which the Form 8621.
election will terminate automatically, in numerator is the amount entered on Enter on line 26 the accrued interest
whole or in part, when any of the line 22 and the denominator is the remaining after the partial termination of
following events occur: amount entered on line 18. The deferred the section 1294 election. This amount
• An actual or deemed distribution of tax is due by the due date of the should equal line 20 minus line 24.
earnings to which the election is shareholder's income tax return (without
attributable (a loan, pledge, or

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Disclosure, Privacy Act, and Paperwork Reduction Act Notice.                                 We ask for the information on this form to carry out the 
Internal Revenue laws of the United States. Sections 6001, 6011, 6012(a), and 6109, and their regulations, require you to 
provide this information. We need this information to ensure that you are complying with the Internal Revenue laws and to allow 
us to figure and determine the right amount of tax. You must fill in all parts of the tax form that apply to you. If you do not file a 
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may be charged penalties and be subject to criminal prosecution.
We may disclose your tax information to the Department of Justice for civil and criminal litigation, and to cities, states, the 
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You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless 
the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long 
as their contents may become material in the administration of any Internal Revenue law.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for 
individual taxpayers filing this form is approved under OMB control number 1545-0074 and the estimated burden for business 
taxpayers is approved under OMB control number 1545-0123. The estimated burden for all other taxpayers who file this form is 
shown below.

Recordkeeping. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 hr., 58 min.
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Preparing and sending the form to the IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           20 hr., 34 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we 
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Instructions for Form 8621 (Rev. 01-2022)                                          -15-

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