PFIC Scope, Assumptions & Supported Scenarios
Defines what the calculator covers, what it assumes, and which scenarios are out of scope.
If you choose to self-prepare, you sign the return and you decide what to report. The 8621 Calculator provides calculation outputs and workpapers only. It does not make filing decisions.
Filer Responsibility Notice (Applies to all use cases)
The calculator provides computation outputs and workpapers only. It does not determine PFIC status, make elections, or decide what must be filed.
The taxpayer (or signing filer) remains responsible for completeness, elections, and reporting positions.
For IRS purposes, the filer remains the preparer and reviewer of record. Use of software outputs does not transfer preparer responsibility.
If you cannot independently review and defend the calculation outputs, this tool is not appropriate for your filing.
Module 1: System Capability vs. Filer Responsibility — Supported, Conditional, and Excluded Scenarios
Supported Scenarios
- Recurring reinvestments (DRIPs)
- Multiple partial sales (FIFO)
- Full liquidations
- Multiple distributions
- Excess distributions under §1291
- Multi-currency support: USD, NZD, AUD, CAD, GBP, EUR, JPY, TWD, SGD, KRW, SEK, CHF, BRL, CNY, HKD, ILS, INR, MXN
Self-Screening Required
These scenarios are supported by the calculation engine, but are only appropriate if you meet the responsibility threshold below.
Appropriate only if you:
- Sign the return and accept the outcome as your own tax position
- Can review the workpapers and decide what to report
- Have complete and accurate transaction records
Not appropriate if you:
- Do not want to sign or assume filing responsibility
- Expect guaranteed outcomes or certainty
- Cannot independently interpret the calculation outputs
If you cannot review the outputs, do not proceed.
Not Supported Scenarios
- Fund mergers or stock swaps
- Cross-PFIC mergers or de-mergers
- Non-cash exchanges
- Share splits or reorganizations
- Incomplete transaction history
- PFIC status cannot be determined
If your case involves reorganizations or missing data, stop and seek professional assistance.
Module 2: Calculation Engine Assumptions
- Input Integrity: Input is complete and chronological (from first acquisition).
- Mapping Authority: CSV mapping is user-confirmed and treated as authoritative.
- Disposition Logic: FIFO lot matching for dispositions (no average cost).
- Loss Handling: No loss recognized on §1291 disposition (per statutory rules).
- FX Methodology: Uses spot-rate methodology per transaction date.
- Status Determination: No PFIC status determination (user must confirm PFIC status).
Module 3: Verification Expectations
Trust, but verify. The output is only as good as the input.
Your Verification Duty
As the self-preparer, you act as the "Reviewing Officer". You must:
- Verify Spot Checks: Manually calculate 1-2 transactions to ensure the logic matches your expectation.
- Trace Totals: Ensure the total "Distributions" on Form 8621 match your 1099/Brokerage Year-End Summary.
- Check Losses: Verify that no losses are claimed on §1291 dispositions (they are disallowed).
- Audit the “PFIC WS” Workpapers: The calculator generates a line-by-line audit trail. You must verify that the ending unit balance, distributions, and carryforward amounts reconcile exactly to your December 31 brokerage statement.
Common Pitfalls to Avoid
- Duplicate Entry: Uploading the same CSV twice.
- Wrong Currency: Mixing CAD transactions with USD 8621 filing currency without conversion.
- Missing Dividends: Forgetting to enter small dividends that were reinvested.
Module 4: Supporting Technical Resources
The following resources explain calculation mechanics, verification standards, and known failure points.
Frequently Asked Questions
Does using this calculator make this website my paid preparer?
No. The 8621 Calculator is a software tool, similar to Excel. Providing a license key or subscription does not create a client-preparer relationship. You are solely responsible for the return.
Can I use this for a corporation or partnership?
Technically yes, but procedurally risky. The math is the same, but the filing requirements (e.g., Form 5471 overlap) are complex. Corporate filers should generally have a CPA review the outputs.