# US Tax: how to report distribution from PFIC that is mark-to-market?



## Biscuit1 (Feb 17, 2021)

I (US citizen) have a Australian-domiciled ETF (A200), which pays distributions consisting of several components. I have a document giving the estimated breakdown of the components, such as dividends, interest, "other income", capital gains, and other amounts such as "other non-attributable amount" (I have interpreted that as return of capital).

An example statement of the distribution components can be found here in the entry for 12 Jan 2021: Announcements

I know that when using the mark-to-market election for a PFIC, that this entire distribution will be taxed at my ordinary income rate. I am simply wondering where/how do I report this on my return? I have thought of 2 ways to do this:

1. Report it all as dividends in schedule B. (likely not this simple...)

2. Try to create my own 1099-DIV as best as possible and report on 1040 from there: 
box 1a: Ordinary dividends = ( dividends + interest + "other income" + anything else in the income categories)
box 2a: Total Capital gain distr. = capital gains (report as short term cap. gains because of mark-to-market election).
box 3: Nondividend distributions = "other non-attributable amount" (return of capital)

Please, I would be grateful for any help or suggestions you could give. Even a generic description of how to consider distributions with a mark-to-market election would be helpful. I know that this post is not very clear, but I did my best.

Thank you


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## Moulard (Feb 3, 2017)

Never had to deal with PFICs, but this may be a good place to start.



https://www.irs.gov/pub/irs-pdf/f8621.pdf





https://www.irs.gov/pub/irs-pdf/i8621.pdf



Each part It might give you guidance on where or how to report that component back to the 1040

If the form and instructions for reporting your shareholding do not help, then your point 2 sounds like the way I might go if I didnd find anything else to go by


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## Biscuit1 (Feb 17, 2021)

Thanks for your answer. Yes I will need to fill out the 8621 form, and as I am making the Mark-to-Market election I will fill out part IV. The other treatments in 8621 do tell you how to treat distributions. However, there's no mention of distributions in part IV, leading me to making the post.

Here's some more thoughts:

Support for using option 1 comes from the instructions for 1099-DIV:
"
Dividends
If you make a payment that may be a dividend but you are unable to determine whether any part of the payment is a dividend by the time you must file Form 1099-DIV, the entire payment must be reported as a dividend. 
"
This says to me that unless you can identify distributions as other things, report it all as ordinary dividends. So I (not expert in any way) believe it to be a valid back-up solution, though perhaps not the most tax-advantageous.

After reading the 1099-DIV instructions, I would amend my option 2 from the original post to be: 
box 2a: long-term cap gains, reported on 1040 as long term cap gains like from a standard 1099-div
box 3: return of capital
box 1a: everything else (interest, short term cap gains, dividends, other income)


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