Form 8621: Reporting Shares in a Foreign Investment Company

Some U.S. people own shares in a foreign company that the tax law calls a passive foreign investment company, or PFIC. Foreign mutual funds are a common example. Form 8621 is the information return that a shareholder of a PFIC may have to file.

The Instructions for Form 8621 (Rev. December 2025) set out the rules. This post is general information, not advice about your holdings.

What makes a company a PFIC

The instructions say a foreign corporation is a PFIC if it meets either of two tests. The income test applies when 75% or more of its gross income is passive income. The asset test applies when at least 50% of its assets, on average, produce passive income or are held to produce it.

Who must file

A U.S. person that is a direct or indirect shareholder of a PFIC must file Form 8621 for each tax year in five situations:

1. The person receives certain direct or indirect distributions from the PFIC.
2. The person recognizes gain on a direct or indirect sale of PFIC stock.
3. The person reports information about a qualified electing fund (QEF) or a section 1296 mark-to-market election.
4. The person makes an election that is reported in Part II of the form.
5. The person is required to file an annual report under section 1298(f).

One form for each PFIC

File a separate Form 8621 for each PFIC in which you hold stock, directly or indirectly. If you own one PFIC that owns another PFIC, you file a form for each one in the chain. For one PFIC, a single form can report Part I together with the other parts that apply.

Interest holders in pass-through entities

Partners, S corporation shareholders, and beneficiaries of some trusts and estates can also be required to file, in certain cases. The instructions say these interest holders generally must file unless an exception applies. Read the full text before you rely on an exception.

The $25,000 Part I exception

The instructions describe an exception from completing Part I for a section 1291 fund. You may skip Part I for that fund if the aggregate value of your PFIC stock is $25,000 or less on the last day of your tax year. You must also not receive an excess distribution from the fund, and not recognize gain on a sale or disposition of its stock. Shareholders on a joint return have a combined limit of $50,000.

This is an exception to one part of the form. It does not remove the duty to file Form 8621 in every case. Read the Part I exceptions in the instructions before you use it.

Elections

Part II covers elections. One example is the election to treat a PFIC as a QEF under section 1295. The instructions give separate sections for each election, with its own rules and deadlines. Elections are not a step to take without reading those rules first.

Exempt accounts

The instructions say a U.S. person who holds PFIC stock through a tax-exempt organization or certain accounts is not treated as a shareholder of the PFIC. The list includes plans under sections 401(a), 403(b), and 457(b), individual retirement plans, qualified tuition programs under section 529, and ABLE programs under section 529A.

When and where to file

Attach Form 8621 to your income tax return, or to the partnership or exempt organization return if one applies. File it by the due date of that return, including extensions. If you are not required to file an income tax return, the instructions give a separate place to file.

Checklist

• List every foreign fund or foreign company you hold, directly or through an entity.
• Check whether each one is a PFIC under the income or asset test.
• Check each of the five filing triggers for each PFIC.
• Add up the stock value on the last day of the year before you use the $25,000 or $50,000 exception.
• Review your other foreign reporting. See Form 8938: Reporting Foreign Financial Assets to the IRS.

Sources: Sources: IRS, Instructions for Form 8621 (Rev. December 2025) (https://www.irs.gov/pub/irs-prior/i8621--2025.pdf) This is general information, not advice about your specific return.

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