rom 8621 Return by a Shareholder of a Passive Foreign OMB No. 1545-1002

(March 1988) Investment Company or Qualified Electing Fund Expres 8-30-90
Depart it of the Tr Attachment
Internal Roverue Serres Note: /RS will issue a revised Form 8621 for subsequent tax years. Sequence No. 69
Name of shareholder Identifying number (see instructions)

Number and street Enter your tax year: Calendar year 19 Other tax year

beginning 19 and ending 19

City or town, state, and ZIP code or country

Check type of shareholder filing the return: _] individual corporation J partnership _]s corporation] nongrantor trust] estatel_] beneficiary

Name of passive foreign investment company or qualifying electing fund Employer identification number (if any)
‘Address (Enter number, street, city or town, and country.) Tax year of Company or Fund: Beginning 19
and ending 19

| Part | i Elections by Shareholders of Qualified Electing Fund

11 |,a shareholder in a qualified electing fund, elect to extend the time for payment of tax on my share of the undistributed earnings of
the fund reported in Part II until the election is terminated. | understand that the amount of deferred tax is subject to interest
computed under section 6621.

Income From a Qualified Electing Fund (QEF) All shareholders must complete lines 2 and 3. Those making the
line 1 election must also complete lines 5 through 7.

2 Enter your pro rata share of the ordinary earnings of the qualified slecting fund. Also, enter this
amount on your income tax return as otherincome . . . . .L2
3 Enter your pro rata share of the net capital gain of the qualified electing fund, This i income is ‘one:
term capital gain income. Enter this amount in Part Il, Schedule D (Form 1120) (corporation); Part Il,
Schedule D (Form 1040) (individual); Part II, Schedule D(Form 1065)(Partnership); Part Il, Schedule

D(Form 1120S) (S corporation); or Part II, Schedule D(Form 1041) (trustorestate). . . . . 3
4 Addlines2and3.. . . -L4
5a Enter the total amount of cash ‘and the fair market value of other property distributed to you during
the tax year of the qualifiedelectingfund . . . . _ | Sa
b Enter the portion of line 4, to the extent not already included i in line 5a, that is ‘attributable to shares in
the qualified electing fund that you disposed of, pledged, or otherwise transferred during the tax year . 5b
c AddlinesSaand5b . . . . . Se

6 If any portion of line 4 is includible i in income under section 981¢ or 551, you may y not make the line 1
election. If no portion of line 4 is includible under section 951 or 551, and if line 4 exceeds line 5c,

you may make the line 1 election with respect to the excess. Enter the excesshere . . 2. EL &
Computation of Amount of Tax the Time for Payment of Which Is Extended
7a Enter the total tax for total taxable income forthe taxyear. . . . . . - woe LTA
b Enter the total tax for the tax year determined without regard to the amount entered on line 6 | 7b

¢ Subtract line 7b from line 7a. This is the amount of tax the time for ‘Payment of which is deferred by
makingtheelectiononlinel . . . . «| 7e

xaalig Distributions of Property in and Disposition of Stock ina Passive Foreign Investment Company

8a Enter the total amount of distributions received during the year Ce wo. | Ba
b Enter the gain on the dispositions of stock in the passive foreign investment company made during

theyear. 2 2 2 rn woe ee LBB

c¢ Add lines 8a and 8b. Also include this amount on your tax return as “otherincome.” . . . » +L 8e

Note: For his or her first tax year beginning in 1987, a shareholder who receives an excess distribution will not be subject to the
deferred tax amount as described in section 1291(c). Excess distributions received in the first tax year beginning in 1987 are allocated
under section 1291 to the current tax year or pre-PFIC tax years. Amounts allocated to these years are included in gross income for the
current year and are not subject to the deferred tax amount.

Under penalties of perjury, | declare that | have examined this return, including accompanying schedules, and to the best of my knowledge and belief, it is true,
Please | correct, and complete.

=)

‘Signature Title (if any) Date
Form 8621 (3-88)



Form 8621 (3-88)

Page 2

Instructions

(Section references are to the Internal
Revenue Code unless otherwise noted.)
Paperwork Reduction Act Notice.—We ask
for this information in order to carry out the
Internal Revenue laws of the United States.
We need it to ensure that taxpayers are
complying with these laws and to allow us to
figure and collect the right amount of tax.
You are required to give us this information.

Who Must File

Adirect or indirect shareholder of a passive
foreign investment company or qualified
electing fund who is a U.S. person must file
Form 8621 (or a statement described in
regulations section 1.1291-10T(d)) for each
tax year in which the shareholder holds
stock in a passive foreign investment
company or qualified electing fund.

Shareholders of a passive foreign
investment company or qualified electing
fund must file a separate Form 8621 for
each passive foreign investment company
or qualified electing fund in which they have
an interest.

Shareholders that are trusts the income
of which is not taxed entirely to the grantor
or other person considered the owner are to
check the “nongrantor” box.

The PFIC provisions apply to U.S. persons
who hold stock in a PFIC directly for their
own benefit or, in certain cases, indirectly.
An indirect shareholder of a PFIC must file
Form 8621 to report a disposition or
distribution from a PFIC even though it did
not actually receive a distribution from a
PFIC or only indirectly disposed of stock. A
U.S. person that is a direct or indirect
shareholder of a qualified electing fund
(QEF) must file Form 8621 as well as
currently include in income its share of the
earnings of the QEF. Generally, a U.S.
person is an indirect shareholder if it is the
beneficial owner of the stock in a PFIC
directly or indirectly held by a nominee, if it
is a shareholder of a PFIC that is a
shareholder of another PFIC, or if itisaa
U.S. person that is a 50 percent or more
shareholder in a foreign corporation that is
a shareholder of a PFIC.

AULS. partnership, S corporation, or
nongrantor trust that is a direct or indirect
owner of a passive foreign investment
company or qualified electing fund must
file Form 8621. Interest holders in these
entities that are U.S. persons must file
Form 8621 when they are subject to
section 1291 or 1293 (including the
election under section 1294).

Where To File

One copy of Form 8621 must be attached
to the taxpayer's income tax return. File a
duplicate copy of Form 8621 with the
Internal Revenue Service, P.O. Box 21086,
Philadelphia, PA 19114 at the same time.

When To File

The form must be filed with the taxpayer's
income tax return for the tax year in which
the taxpayer holds an interest in a passive
foreign investment company or a qualified
electing fund.

Ashareholder making the election to
extend time for payment of the tax on his or
her share of the earnings of the fund must
file Form 8621 by the due date of his or her
tax return including extensions.

Identifying Number

Individuals enter their social security
number. All other entities enter their
employer identification number.

Passive Foreign Investment
Company

Whether a foreign corporation is a passive
foreign investment company is determined
either by an income test or an assets test. If
75% of a foreign corporation's gross income
for the tax year is passive income (as
defined in section 904(d)(2)(A) without
exceptions in clause (iii)); OR if at least 50%
of the average value of the corporation's
assets for the tax year are attributable to
assets used in the production of passive
income or held for the production of passive
income, the foreign corporation is a passive
foreign investment company.

A qualified electing fund is a passive
foreign investment company which has
made an election that its shareholders who
are U.S. persons will include their pro rata
share of the annual earnings of the fund in
their income. U.S. shareholders who own
(or are treated as owning) stock of a
qualified electing fund must include
amounts in gross income in the tax year in
which the tax year of the qualified electing
fund ends.

Tax Consequences of Being a
Shareholder of a Passive Foreign
Investment Company

Shareholders of a passive foreign investment
company include amounts in gross income
when they receive distribution. When these
shareholders receive an “excess
distribution” (as defined in section 1291(b))
or dispose of stock, portions of the excess
distribution are treated differently. The
portions of the excess distribution that are
attributable to the current year and pre-PFIC.
years are taxed as ordinary income. The
Portion of the excess distribution that is
attributable to the period that the foreign
corporation was a passive foreign investment
company is subject to the deferred tax
amount.

Tax Consequences of Being a
Shareholder of a Qualified
Electing Fund

Ashareholder in a qualified electing fund is
subject to the yearly inclusion of income of
the earnings of the fund, and the election to
defer payment of tax which incurs an
interest charge.

Instructions for Part !

Line 1.—A shareholder ( including an
interest holder of a pass-through entity, such
as a partnership or S corporation that is a
shareholder) of a qualified electing fund may
elect to extend the time for payment of the
tax on his or her share of the undistributed
earnings of the fund for the year. If the
election is made, interest will be imposed on
the amount of the deferred tax.

The election cannot be made for a tax
year in which any portion of the
shareholder's pro rata share of the fund's
earnings 's tax under section 551 or section
951.

The election also cannot be made with
respect to any earnings distributed or
deemed distributed to the shareholder. See
section 1294 and related regulations.

To make this election, check the box on
line 1 and complete Part Il.

Part Il Income From a Qualified
Electing Fund

Lines 2 and 3.—The information on lines 2
and 3 is information submitted to you by the

qualified electing fund. Attach a copy of this
information to Form 8621

Computing Your Total Tax If You Make
the Election on Line 1

Enter in line 7a your total tax (line 10,
Schedule J, Form 1120 or line 53, Form
1040) for your total taxable income
(including your share of undistributed
earnings of the QEF) for the tax year.

Calculate your total tax as if your total
taxable income did not include your share of
the undistributed earnings of the QEF (the
excess of line 4 over line 5c). If the amount
of the distributed earnings (line 5c) is less
than line 4, for purposes of the calculation,
reduce the amounts included in gross
income and capital gain net income
proportionately. Enter the total tax, as
recomputed, from line 10, Schedule J,
Form 1120 (corporations) or line 53, Form
1040 (individuals) on line 7b.

Subtract line 7b from line 7a; the
difference is the amount of your total tax
that is attributable to the undistributed
earnings of the QEF. The time for payment
of this tax is extended by making the line 1
election. See section 1294 and the
regulations thereunder.

Because the line 1 election only extends
the time for payment of the tax on the
undistributed earnings of the QEF, the
amount entered on line 7c must be “backed
out” of your return. If you are a corporation
making the Part | election, write “SECTION
1294” and the amount of tax entered on
line 7c to the left of line 10, Schedule J,
Form 1120. Subtract the amount in
brackets from the total of lines 6 through 9b
and enter the result on line 10 and
complete the rest of the form. If you are an
individual, write “SECTION 1294” and the
amount of tax entered on line 7c to the left
of line 53 and subtract the amount in
brackets from the total of lines 47 through
52, enter the result on line 53, and
complete the rest of the form.

Grantor trusts making the line 1 election
should complete Form 1041 as follows.
Include their pro rata share of the earnings
of the (QEF) in gross income. Complete the
remainder of Form 1041 (up to line 29,
page 1). Enter the line 7c amount to the left
of line 29, and label the amount “Section
1294.” Subtract the section 1294 amount
from the total of lines 26 through 28, and
enter the net amount on line 29.

When the QEF makes a distribution, or
you directly or indirectly transfer, pledge, or
otherwise dispose of your stock, the amount
on line 7c will be due, in whole or part,
subject to interest under section 6601. See
section 1294 and the regulations
thereunder for the events that will
terminate the line 1 election.