Scenario : Passive Foreign Investment Company PFIC
US taxpayer owns shares in a foreign mutual fund that qualifies as a PFIC.
Fund does not offer QTIP or MarktoMarket elections.
The taxpayer has held the shares for years and made no distributions.
FMV of shares: $ with a basis of $
Estimated "excess distributions" from the fund: $
Wages: $
Interest and Dividend Income USbased: $
Itemized Deductions: $
Allowable deduction for selfemployment tax: None
Calculate:
The potential tax liability upon the sale of the PFIC shares.
Analyze the different tax treatment options available for PFIC holdings.
