Taxation of Canadians in America by Dale Walters Sally Taylor David Levine

Author:Dale Walters,Sally Taylor,David Levine [Dale Walters]
Language: eng
Format: epub
Tags: BUSINESS & ECONOMICS / Personal Finance / Taxation
ISBN: 9781770409125
Publisher: LightningSource
Published: 2012-12-01T06:00:00+00:00

2.1b Mark-to-market election

A shareholder of a PFIC may also elect each year to recognize the gain or loss on the shares as if they had sold the PFIC shares at fair market value at the end of the taxable year. Called a “mark-to-market election,” this election must also be made on Form 8621. The gain is treated as ordinary income, not a capital gain.

The mark-to-market election is only available for marketable shares. Marketable shares are shares that are regularly traded on a US securities exchange that is registered with the US Securities and Exchange Commission (SEC), or on a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, and has certain characteristics as described in the US tax code. The problem with this method is that you have no way of knowing what the mutual fund bought the securities for so you have no way of knowing what the gain would be if the securities were mark-to-market and even if you did, who is going to pay for your accountant to go through each of the potentially thousands of securities in your Canadian mutual funds?

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