Losses and Form 8621 for PFIC

[js1884]

Hi,

I own CEF and GTU, which I purchased during 2014 in a taxable account. Both are trading below my purchase price, and I'd like to sell to (hopefully) offset other taxable short-term gains (in regular non-PFIC equities). Does anyone know the mechanics of doing this? Should I still file form 8621 this year? I've searched all over, and many people talk about the need to make the QEF election to ensure that long-terms gains will get preferential tax treatment.. but no one talks about losses.

Thanks!

[steve]

First off let me make it clear that I am not a tax professional. I think what would I do if I were you. I do not think you have to file anything if you sell everything at a loss, however it only take a minute to fill out and file form 8621 so that is not a big deal either way. Now what I would be examine is the reason for selling recently bought precious metals gold etc. Both are selling at big discounts and seems to me more like a time to be buying rather then selling. Sometimes it is better to just pay tax on a gain. I would not touch my portfolio unless I reached or came very close to a re-balance band for me its somewhere close to 15/35 but I start to watch close at the 20/30 point. PP when balanced is 25% of each of the 4 assets.

The other holding you mention is a short term gain so also not sure why you want to sell it or what you were thinking when you where buying these assets. Are you a trader or an investor? I like most on this forum are investors that follow the PP with the money we can not afford to lose with maybe a small amount that we could afford to lose on speculation
Best way to do speculation investing in my opinion is in a Roth IRA where you do not have to deal with taxes as they have already been paid.

[dualstow]

however it only take a minute to fill out and file form 8621 so that is not a big deal either way

Listen to Steve; he knows what he's taking about.

My accountant didn't think I needed to file any gold forms (despite my fwd'ing some of steve's posts) and while it's not an issue right now, it bothers me each and every time I look at my account that I did not file when I could have. I should have been more stubborn with the accountant.

[Libertarian666]

Personally, I file for every year in which I had any PFIC holdings.
My understanding is that you don't have to file, but if you don't file every year that you hold a particular batch of PFIC shares, then any profits on those shareswill not be eligible for the favorable LTCG rates. However, if you have losses, that may not be relevant.

[rickb]

however it only take a minute to fill out and file form 8621 so that is not a big deal either way

Listen to Steve; he knows what he's taking about.

My accountant didn't think I needed to file any gold forms (despite my fwd'ing some of steve's posts) and while it's not an issue right now, it bothers me each and every time I look at my account that I did not file when I could have. I should have been more stubborn with the accountant.

If it's less than 3 years ago, you can still file amended returns.

[dualstow]

Yep, Steve once told me something similar. It's being dealt with.