Describe your idea. The more information you provide, the clearer picture of your idea we will have. |
Add a calculation for section 1291 for form 8621. |
How will this idea help you and potentially others? Understanding how things are done today, where the pain is, and how the idea is beneficial puts us in your shoes. |
Section 1291 is the default method of taxation for PFICs. Adding this calculation into K-1 Analyzer for form 8621 would save time and reduce errors. |
Who will benefit from this idea? Whether it's specific roles of users, users of a specific product, or certain departments/markets, this helps us know who to talk to when we need more information. |
Any entity invested in PFICs. |
How do you envision this idea being implemented at K1x? You're the expert and understanding how you see this working helps kickstart the idea. |
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This is an interesting thought but an enormous ask and maybe tempting for them as a separate offering. Even the IRS can't handle this one and they frequently refund 1291 tax to taxpayers who actually owe it. IRS auditors seldom dive into the excess distributions for active PFICs and instead focus on dispositions. Definitely one of the most painful pieces of foreign compliance I agree. This ask would require K1A to create a separate database table where each PFIC for each year is assigned a unique ID and apart from getting the OCR correct each year which is difficult in itself would need to somehow successfully match sometimes thousands of PFICs together across at least 3 previous years and track the elections you make on those PFICs. The burden of successfully executing this would be maybe 10% on K1A and 90% on funds who are also barely able to handle Part VII on the K-3 and end up just creating custom schedules to deliver that info. Make some noise for a standardized digital schema (instead of PDF delivery) that filers have to adhere to and this has an instant shot of being achievable. My understanding is that K1A is pushing for this digital schema.