The PFIC regime applies when a US person owns an interest in a foreign corporation that is treated as a PFIC, i.e., if either the 50 percent asset test or 75 percent income test is satisfied.
How do I report Pfics?
U.S. investors who own shares of a PFIC must file IRS Form 8621. This form is used to report actual distributions and gains, along with income and increases in QEF elections. The tax form 8621 is a lengthy, complicated form that the IRS itself estimates may take more than 40 hours to fill out.
How are Roth IRAs treated in a spreadsheet?
The spreadsheet should have these columns: For this purpose you treat all your Roth IRAs as one large Roth IRA (but your Roth IRA and your spouse’s Roth IRA are separate). If a conversion is partially taxable, you do two entries, one for the taxable portion, another for the non-taxable portion.
When to make a Roth IRA contribution for an expat?
Contributions must be made before April 15 th for that year. Contributions must be made from earned (rather than passive) income, and married expats can also make a contribution for their spouse (if they are filing jointly). Many expats claim the Foreign Earned Income Exclusion on Form 2555 to reduce their US tax bill.
Do you record the in and out of a Roth IRA?
You record only the in’s and out’s — what happens inside the Roth IRA or between two different Roth IRAs doesn’t matter. The spreadsheet should have these columns: For this purpose you treat all your Roth IRAs as one large Roth IRA (but your Roth IRA and your spouse’s Roth IRA are separate).
Can a Roth IRA be used as an emergency fund?
Some say a Roth IRA can be used as an emergency fund because you can withdraw the “principal” of your contributions at any time, tax free, no questions asked. It’s true. However, if you ask me now how much “principal” I currently have available in my Roth IRA for this type of withdrawal, I have no idea. Do you know yours?
