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PFIC Identification & Analysis Tools

Determine whether your foreign investments qualify as Passive Foreign Investment Companies and understand your Form 8621 filing obligations.

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What Is a PFIC?

A Passive Foreign Investment Company (PFIC) is a foreign corporation that meets either the Income Test or the Asset Test. U.S. shareholders of PFICs face punitive tax treatment unless they make timely elections.

Common examples include foreign mutual funds, ETFs domiciled outside the U.S., foreign holding companies with mostly passive assets, and foreign pension funds with passive income.

75%

Income Test

A foreign corporation is a PFIC if 75% or more of its gross income is passive income — including dividends, interest, rents, royalties, and capital gains.

50%

Asset Test

A foreign corporation is a PFIC if 50% or more of its assets produce or are held for the production of passive income.

Why It Matters

Excess Distribution Regime (Default)

Without an election, gains and excess distributions are allocated over the holding period, taxed at the highest rate for each year, plus an interest charge. This is the most punitive treatment.

Qualified Electing Fund (QEF)

Elect to include your pro-rata share of the PFIC's ordinary earnings and net capital gains annually. Requires an Annual Information Statement from the PFIC.

Mark-to-Market (MTM)

Elect to mark your PFIC shares to fair market value at year-end. Gains are ordinary income; losses are ordinary (limited to prior MTM gains). Only available for marketable stock.

Our PFIC Tools

Free diagnostic and tracking tools to help you identify and manage PFIC exposure.

PFIC Diagnostic Tool

Free

Interactive questionnaire that evaluates your foreign investment against PFIC criteria. Get an instant assessment with detailed reasoning and recommended next steps.

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PFIC Annual Tracker

Free

Track your PFIC investments year over year. Store annual data locally in your browser with CSV export for your tax preparer.

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PFIC in Structures

Pro

Automatically flag potential PFICs within your international ownership structures. Integrated into the Structures product for comprehensive entity analysis.

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PFIC Tax Impact Calculator

Free

Compare the tax impact of the three PFIC regimes — excess distribution, QEF election, and mark-to-market — side by side with your actual numbers.

Calculate Impact

How the Diagnostic Works

Four simple steps to evaluate your PFIC exposure.

1

Investment Details

Tell us about the foreign entity — type, country, primary business activity, and income sources.

2

Ownership Info

Specify your ownership percentage, acquisition date, and whether you have access to financial statements.

3

Timeline

Provide the tax year under analysis and any prior PFIC determinations or elections.

4

Get Diagnosis

Receive an instant PFIC likelihood assessment with detailed reasoning, applicable tests, and recommended elections.

Instant PFIC Analysis

Highly Likely PFIC
Based on the information provided
Income Test (75%)Asset Test (50%)
Foreign mutual fund commonly associated with PFIC classification
Entity generates primarily passive income (dividends, interest, rents)
Form 8621 annual filing likely required for each PFIC investment
Consider QEF or Mark-to-Market election to avoid excess distribution regime

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