Investment fund vs. real estate for Portugal golden visa; PFIC for US citizens

With respect to your other questions:

I won’t know for a while til my accountant gets around to my tax debacle (since I am paying for correct answers rather than face this myself) but I don’t think 5471 or 8865 apply. Nor do I think 926 applies because you are buying and selling shares of a fund, you’re not transferring money to a corporation. These GVs are funds, not corporations, and the header of 8621 itself says Passive Foreign Investment Company not Corporation; a corporation may be a PFIC but not all PFICs are corporations.

I’d note that these funds are registered with CMVM as Fundo de Capital de Risco. Rather explicitly a fund, not a corporation. If it were a corporation, it’d be registered with the ministry of business or something with a business ID, not the market regulator. This in and of itself gives you a huge hammer if the IRS were to question whether it’s a corporation or not - the Portuguese government says it’s not in Big Bold Letters.

I suspect it is really quite straightforward, you file 8621 and pass through the values appropriately to the main forms (sched a/b/d/e/4797/114 as applicable) and that’s it. The trick is interpreting the PFIC form into the right shape.

I do think the $200 spent on one of those PFIC-specialist firms to interpret your PFIC into a 8621 is worth it, and they will answer all the rest of these questions as part of the process, simply because 8621 is a pass-through form so they should tell you where to pass the values through to, since 8621 itself is a touch vague. They probably have standard guidance. It can’t be that complicated if a firm will do it for $200. No I don’t have names, I saw a couple and had one recommended but I can’t remember it.

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any specific firms you recommend for this?

Still can’t remember, sorry. Even then it wouldn’t be a recco from me.

I found a few tax firms that specialize in filing taxes for foreigners living in the US and US citizens living abroad. They seem to do both. I got quotes from a handful of firms. Some were several thousand dollars or only quoted an hourly fee with a minimum, but not maximum. Assuming the fund you invest in provides a proper PFIC annual statement I don’t think it’s a ton of work on the preparers end. Two places I think are worth contacting were:

I decided to move forward with online taxman, just uploaded my docs. DM me if you’re interested in a referral code for them.

Has anyone who has invested in Greytech II last year received a PFIC from them? I know that the investment just closed near the very end of last year, but I think to file all of the proper US IRS paperwork, we still need the PFIC even though the fund wasn’t really investing in 2021.

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I think this depends on how clear the document you get is. Trust me, they aren’t all always so clear.

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I reached out to them last month and they responded saying year end documents would be available in the investor portal by mid-March.

re: Greytech II. Has anyone determined at this point, and prior to the release of year end docs. in mid-march, if US citizens need to begin filing 2021 tax returns to indicate a PFIC investment? Or will we defer this until 2022?

Hard to say, without knowing what they will state in their report. I was going to check with my accountant after receiving the docs. Will likely have to file an extension given timing of release.

Thanks for the response, and for checking with them on that. That timing isn’t perfect, but it is good to know it is coming!

I just received an invite from Greytech II for an zoom call on March 17 for US investors that is focused on U.S. Tax Compliance. If you are a Greytech II investor and didn’t receive the invite please contact them.
The discussion includes presentations by a US tax attorney and a US estate and tax planning specialist.

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Thanks for the information about that. I didn’t get that email, so I’ve just written to my contact asking for the link. I’m unfortunately going to be traveling that day, but perhaps they will also record it, or it will be at one of the times I am not in the air!

ETA: My agent at Iberis sent me the link. Thanks for letting me know about it on the forum!

Thanks again for the heads-up on that seminar! I had to miss the presentation itself because I was on a severely delayed flight (I tried with the in-flight wifi, but no luck), but the PDF they sent out afterwards was great. I’m glad I didn’t miss that!

On a separate note, fwiw, I still don’t see my PFIC in my investor portal. I’m hoping they upload that soon, since it would be nice to be done with my tax filing!

They said by end of March. The low down, if you are a US citizen, residing as a resident of the US and investing as an individual (family) in Iberis funds then you need to annually file only 3 forms:
Form 114 (FBAR)
Form 8938 (FATCA)
Form 8621 (PFIC) and doe a QEF election.

Thanks! That’s what it seemed like from reading through the slides, but I’m glad to get that confirmation. I’ll just keep checking the portal for the PFIC as we get to the end of March.

Bison Bank /IMGA Fund investor. My accountant is saying the “year end” statement received from Bison doesn’t qualify as a proper PFIC Statement. Looking at the regs (learning more about this than I care to) it does seem like aside from the financial stuff, with Bison being an “intermediary” under the regulations, the statement is supposed to have some statement that a shareholder shall be permitted to examine the books and records to establish the gains/income/etc are computed in accordance with US income tax principles.

The statement otherwise seems to have the financial particulars to complete the tax forms (and importantly claim QEF) Is anyone else encountering this or are accountants accepting the year end statement as acceptable for PFIC reporting?

No yet, but thanks for the heads up. My fund manager said they’d issue the PFIC directly so you may want to check there. I do need statements for FATCA from Bison and another bank to comply with State Department reporting so what you got is t necessarily redundant.

Your accountant is correct. The PFIC statement by law is very specific. From what I understand when I spoke to a CPA, you can only use the statement issued by an intermediary (Bison) only if they received PFIC statement from the fund. You can read the law here, section (g) talks about PFIC statement.

Bison statement can be used for FBAR & FATCA. The fund must issue the PFIC, if they do at all. Otherwise you need some kind of statement that allowals you to calculate the pro-rata shares of the entire fund that you hold and their value. And yes, claim a QEF election or you’re in for a whole lotta taxation pain eventually.

Are you using someone that would take a remote client? I’m in the same boat

If so shoot me a dm with their info

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