I'm dual citizen (US & Canada) residing in Canada. I returned to Canada two years ago. I just started thinking about investing again in Canadian equities (either stocks, ETF's or mutual funds). Then I found out about the tax reporting requirements of form 8621. From what I read online it seems that completing this form for each of your Canadian investments is too complicated and you'll end up spending more money having your taxes prepared than you can get from the investments. So my question is, if I buy US equities from my Canadian brokerage account do I still have to get the from 8621 completed or are these investments treated the same as my equity investments in my US brokerage account?

  • Are you sure your Canadian investments would constitute a PFIC to the US IRS? – quid May 9 '17 at 20:55
  • Thanks for your comment. No I'm not sure. I guess that is what I'm asking. Do funds, such as, for example “Mawer U.S. Equity Fund Profile” (aka MAW108) constitute a PFIC? I asked my tax accountant and she said she didn't know. But to to be safe I shouldn't invest in funds like this. – Simonicus May 10 '17 at 22:00
  • Also be careful of the vehicles you use to invest - TFSAs, RRSPs, RESPs, etc. all have additional filing requirements if you are a US citizen, which can be quite onerous. – Grade 'Eh' Bacon Jan 8 '18 at 13:40

I'm not a professional, but my understanding is that US funds are not considered PFICs regardless of the fact that they are held in a foreign brokerage account.

In addition, be aware that foreign stocks are not considered PFICs (although foreign ETFs may be).

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Mawer is a Canadian firm and MAW108 is traded primarily on the TSE, so yes, MAW108 is a PFIC to the IRS and should be avoided by people like you and me (people with US tax liability for life through our citizenship).

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