- quote -

If you don't make the QEF election you may be effectively converting
capital gain into ordinary income. Other adverse consequences may
also apply.

- quote -

Yes, the section 1 rates are in the tax tables. For individuals the
section 1 rates apply.

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<jmail7[at]andrewmitchel.com> wrote in message
news:c6f2bcab-30eb-4942-b78d-45047b4bb8ae[at]y77g2000hsy.googlegroups.com...
- quote -

Because of the cash holding to keep the company solvent, it looks like I'm
caught by the PFIC rules, and therefore have to fill out form 8261. However
dividends haven't been over the excess level, except by a few hundred
dollars due to foreign exchange rate movements.

As a result, it looks like it's best not to go with the QEF election.

So, when I go back and allocate the excess on a gain, it says that I should
use the highest rate of tax under section 1 or section 11 for a given year.

Where would I find the tax rates applicable for a given year? Are they in
the 1040 instructions for each year?

Tony

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

- quote -

Note that if the foreign corporation is not controlled by U.S. persons
and you are not a category 4 filer, then you need to assess whether
the foreign corporation is a passive foreign investment company
(PFIC). If it is a PFIC, then you may want to make a qualified
electing fund (QEF) election or a mark-to-market election.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

A Wieser wrote:
- quote -

imply that GAAP says it is reflected in the retained earnings
delta. I have no idea how a foreign corporation operating out of
a foreign country with accounting procedures not consistent with
US GAAP accounted for it.

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<jmail7[at]andrewmitchel.com> wrote in message
news:fee157cc-707c-4a1b-8a04-5a355fb7d7a4[at]13g2000hsb.googlegroups.com...
- quote -

True, that's there on Schedule M, line 21, but it's only true for category 4
filers.

Tony

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On Mar 12, 12:53*pm, "A Wieser" <m...[at]wieser.plus.com> wrote:
- quote -

The dividends paid would also be shown on Schedule M.

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- quote -

That was what I assumed. Thanks for the corroboration.

Tony

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A Wieser wrote:
- quote -

on Schedule F.

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Thanks Alan for answering my 5471 questions so far. It's been a great help.

I think I've now figured almost everything out. The only thing I'm not sure
about is where to report the dividends paid by the company on 5471 schedule
C.

If they were to be recorded, they'd have to come out on line 19, but it
doesn't seem that they're an extraordinary item. Are they a prior period
adjustment?

Alternatively, are they just not listed at all, and assumed to have been
paid as the difference between beginning retained earnings and final
retained earnings?

Alternatively, if they don't go on schedule C, do they go somewhere on
Schedule F?

Tony

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >