US IMGA investors tax filing

Response from Jorge:

The income received by the Fund is reinvested into the Fund. This process does not affect the number of shares, only its value (NAV).
This Fund is an accumulation Fund and not a distribution one, means that it does not pay income to the shareholders, as mentioned above, the income received by the Fund is reinvested into it.
If there was any income distributed to the Fund’s shareholders, it would appear as “Cash/property distribution” on the table of the PFIC statement (below).
(picture of extra column on the statement )

Seems like a bit of a non-answer, no?

The question is why the price appreciation for the shares does not match the reported gains (short and long term), right?

Here’s how I interpreted it, and I completely cop to the fact that I could be dead wrong.

I’ve based this on the assumption that there are a fixed number of shares in the fund, and as a result, the reinvestment raises the NAV of each share. As opposed to distributing it and thus lowering the NAV; albeit we as investors would have cash in hand to compensate for the lower NAV.

Again, I don’t claim this is correct, merely how I (perhaps naively) interpreted Jorge’s response.

Column 1 Column 2 Column 3
Number of fund shares 1,000,000 Assuming number of shares in fund is fixed.
Original total value 1,000,000,000
Value / Share 1,000
Earnings / share 5% = 50
New fund value (original + (EPS * #shares)) 1,000,000,000 + (50 * 1,000,000) = 1,050,000,000 Reinvested in underlying assets but number of shares does not increase
New value / share 1,050,000,000 / 1,000,000 = 1,050

Don’t forget to submit your FBARs folks, filed mine today

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This math doesn’t square though - the whole thing started when we realized the increase in share price does not match the reported earnings

I suppose the charitable and possibly correct way to understand that is, that the fund’s shares are undervalued on the market. i.e. the assets they own increased in value, but that is not reflected in the price of the shares because at the most basic level people aren’t buying it

Anyway, taxes filed (or nearly, I need to mail them still)

FreeTaxUSA still doesn’t efile the 8621, so I have to mail everything. I hear from reddit that supports efiling the 8621, but I was already mostly done by the time I got there, so it’s USPS for me. But maybe I’ll try it next year, and maybe some of you are worse procrastinators than I am and can use it

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