Instructions For Form 8621 - 2016 (Page 3 of 14) in pdf

governmental authority of the country in

reference ID number or for permission

Specific Instructions

which the market is located and has the

to use these numbers.

characteristics described in Regulations

Important: All line references to Form

Note. In general, the reference ID

section 1.1296-2(c)(1)(ii).

1120 and Form 1040 are to the 2016

number assigned to a PFIC or QEF on

Stock in certain PFICs described in

forms. Other entities should use the

Form 8621 has relevance only to Form

Regulations section 1.1296-2(d).

comparable line on their tax return.

8621 and should not be used with

For additional information, including

respect to the PFIC or QEF on other IRS

Excepted Specified

special rules for RICs that own PFIC

forms.

stock, see Regulations section 1.1296-1

Foreign Financial Assets

Requirements. The reference ID

and 1.1296-2.

Reported

number must be alphanumeric (defined

below) and no special characters or

Check this box only if the Form 8621

Tax Consequences

spaces are permitted. The length of a

filer also files Form 8938, Statement of

After a PFIC shareholder elects to mark

given reference ID number is limited to

Specified Foreign Financial Assets, for

the stock to market under section 1296,

50 characters.

the tax year and includes this form in the

the shareholder either:

For these purposes, the term

total number of Forms 8621 reported on

1. Includes in income each year an

“alphanumeric” means the entry can be

line 4 of Part IV, Excepted Specified

amount equal to the excess, if any, of

alphabetical, numeric, or any

Foreign Financial Assets, of Form 8938.

the fair market value of the PFIC stock

combination of the two.

For more information, see the

as of the close of the taxable year over

Instructions for Form 8938, generally,

The same reference ID number must

the shareholder's adjusted basis in such

and in particular, Duplicative Reporting

be used consistently from tax year to tax

stock, or

and the specific instructions for Part IV,

year with respect to a given PFIC or

Excepted Specified Foreign Financial

2. Is allowed a deduction equal to

QEF. If for any reason a reference ID

Assets.

the lesser of:

number falls out of use (for example, the

PFIC or QEF no longer exists due to

a. The excess, if any, of the

Address and Identifying

disposition or liquidation), the reference

adjusted basis of the PFIC stock over its

Number

ID number used for that PFIC or QEF

fair market value as of the close of the

cannot be used again for another PFIC

tax year, or

Address. Include the suite, room, or

or QEF for purposes of Form 8621

b. The excess, if any, of the amount

other unit number after the street

reporting.

of mark-to-market gain included in the

address. If the post office does not

There are some situations that

gross income of the PFIC shareholder

deliver mail to the street address and

warrant correlation of a new reference

for prior taxable years over the amount

the shareholder has a P.O. box, enter

ID number with a previous reference ID

allowed such PFIC shareholder as a

the box number instead.

number when assigning a new

deduction for a loss with respect to such

Identifying number. Individuals

reference ID number to a PFIC or QEF.

stock for prior taxable years.

should enter a social security number or

For example:

a taxpayer identification number issued

See the instructions for Part II,

In the case of a merger or acquisition,

by the IRS. All other entities should

Election C, and Part IV, later, for more

a Form 8621 filer must use a reference

enter an employer identification number.

information, including special rules that

ID number which correlates the previous

may apply in the year that a mark-to-

reference ID number with the new

Reference ID number. A reference ID

market election is made.

reference ID number assigned to the

number is required in the applicable

PFIC or QEF.

entry space above Part I of the form only

Basis adjustment. If the stock is held

In the case of an entity classification

in cases where no EIN was entered for

directly, the shareholder's adjusted

election that is made on behalf of a

the PFIC or QEF. However, filers are

basis in the PFIC stock is increased by

PFIC or QEF on Form 8832,

permitted to enter both an EIN and a

the amount included in income and

Regulations section 301.6109-1(b)(2)(v)

reference ID number. If applicable, enter

decreased by any deductions allowed. If

requires the PFIC or QEF to have an

the reference ID number (defined

the stock is owned indirectly through

EIN for this election. For the first year

below) you have assigned to the PFIC

foreign entities, see Regulations section

that Form 8621 is filed after an entity

or QEF.

1.1296-1(d)(2).

classification election is made on behalf

A “reference ID number” is a number

of the PFIC or QEF on Form 8832, the

Additional Information

established by or on behalf of the U.S.

new EIN must be entered in the

Required

person identified at the top of page 1 of

applicable entry space above Part I of

the form that is assigned to a PFIC or

Form 8621 and the old reference ID

Reportable transaction disclosure

QEF with respect to which Form 8621

number must be entered in the

statement. A 10-percent shareholder

reporting is required. These numbers

applicable entry space just below. In

(by vote or value) of a QEF also may be

are used to uniquely identify the PFIC or

subsequent years, the Form 8621 filer

required to file Form 8886 if the QEF is

QEF in order to keep track of the entity

may continue to enter both the EIN and

considered to have participated in a

from tax year to tax year. The reference

the reference ID number, but must enter

reportable transaction pursuant to

ID number must meet the requirements

at least the EIN.

Regulations section 1.6011-4(c)(3)(i)

set forth below.

You must correlate the reference ID

(G). See Form 8886, Reportable

numbers as follows: New reference ID

Transaction Disclosure Statement, and

Note. Because reference ID numbers

number [space] Old reference ID

Regulations section 1.6011-4 for

are established by or on the behalf of a

number. If there is more than one old

additional information.

U.S. person filing Form 8621, there is no

reference ID number, you must enter a

need to apply to the IRS to request a

-3-

Instructions For Form 8621 - 2016 Page 3

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