Opting Out of PFIC Tax-and-Interest Treatment: Making QEF Elections on Form 8621 Part II

A live 110-minute CPE webinar with interactive Q&A

Tuesday, October 17, 2017
1:00pm-2:50pm EDT, 10:00am-11:50am PDT

Early Registration Discount Deadline, Friday, September 22, 2017

This webinar will provide tax advisers with a guide to the complex Qualified Electing Fund (QEF) election rules for foreign investments that are Passive Foreign Investment Companies (PFIC). The panel will go beyond the mechanics of PFIC reporting to detail the advantages, disadvantages and calculations involved in making a QEF election. The webinar will discuss making a “deemed sale election” after the year of purchase, detail how to report the election on Form 8621, and define the planning opportunities in electing out of PFIC treatment.


Among the most complex regimes of taxation and reporting under the Code is that which results from the classification of certain foreign investments held by U.S. taxpayers as investments in Passive Foreign Investment Companies (PFICs). The impact of the PFIC designation is to subject U.S. investors to a tax and accrued interest regime that is both complicated and expensive.

Because the PFIC regime is intended to prevent U.S. persons from deferring U.S. taxation on passive investments held through foreign companies, taxpayers may avoid the tax-and-interest treatment by electing current tax treatment of their PFIC holdings. The primary mechanism for opting out of the PFIC regime is by making an election to treat the PFIC as a qualified electing fund (QEF), which allows taxpayers to avoid interest accrual by paying tax on their pro rata share of income from the QEF.

The QEF election avoids the tax-and-interest scheme altogether if made at the time the foreign investment is acquired. Taxpayers wishing to make a QEF election in subsequent years must make an appropriate additional election to remove the “taint” of PFIC status from the asset. These additional elections, which involve gain recognition, are reported on Form 8621.

Alternatively, taxpayers whose PFIC stock is marketable may elect to mark such stock to market and report proceeds from the deemed sales as ordinary income.

Listen as our experienced panel goes beyond the basics of Form 8621 to provide a thorough discussion of QEF elections and other means of avoiding the PFIC regime.


  1. Overview of PFICs
  2. Possible advantages of QEF election
  3. Making election in year of purchase
  4. Making election in a subsequent year after initial purchase
  5. Mark-to-market elections
  6. Reporting the election on Form 8621 Part II


The panel will discuss these and other important issues:

  • Identifying assets that constitute PFIC holdings
  • Differentiating tax results between PFIC, mark-to-market and QEF scenarios
  • Identifying tax impact of QEF election in a year subsequent to acquisition of the PFIC asset
  • Where to report QEF and purging elections on Form 8621

Learning Objectives

After completing this course, you will be able to:

  • Determine scenarios in which to make a QEF election
  • Identify the elections and calcuations necessary to make a QEF election in a year subsequent to asset acquisition
  • Discern whether a mark-to-market election would be more tax efficient than a QEF election
  • Recognize the filing requirements on Form 8621 for making initial QEF election and subsequent years purging elections


Michael Knobler
Fenwick & West, Mountain View, Calif.


Thomas D. Phelan
Pepper Hamilton, Philadelphia

Mr. Phelan focuses his practice on tax law. He has written on tax law issues and co-authored an article with Steven Bortnick,Planning For Qualified Dividend Income When Taking Foreign Companies Public.

David Stauber, Of Counsel
Pepper Hamilton, New York

Mr. Stauber focuses his practice on the federal income tax aspects of mergers and acquisitions, fund formation, and securities offerings matters. He handles a broad range of transactions including cross-border transactions and corporate restructurings, and has considerable experience with both inbound and outbound international tax matters.

Registration per Person for Live Event

Additional lines for this conference can be purchased at 25% off. For orders of five or more lines, further discounts will apply and will be automatically reflected in the cart.

Live Webinar $97.00

Includes Early Discount Savings of $50.00 (through 09/22/17)

Live Webinar & CPE Processing $132.00

Includes Live Webinar Early Discount Savings of $50.00 (through 09/22/17)

CPE per Person on Live Event

Continuing Professional Education credit processing is available for an additional fee. CPE processing must be ordered prior to the event. To qualify for CPE you may not listen via the telephone.

This program is eligible for 2.0 CPE credits.

  • Field of Study: Taxes.
  • Level of Knowledge: Intermediate.
  • Advance Preparation: None.
  • Teaching Method: Seminar/Lecture.
  • Delivery Method: Group-Internet (via computer).
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of verification codes announced throughout the presentation.
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Knowledge and understanding of passive foreign investment company (PFIC) rules, including taxation of PFICs and filing requirements; familiarity with IRS Form 8621.

NOTE: CPE credit processing for all attendees must be ordered by 2pm Eastern the day of the program to receive a Certificate of Attendance within 24 hours.


Recorded Event

Includes full event recording plus handouts (available after live webinar).

Note: Self-study CPE and EA credits are not offered on recorded events.

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Available 48 hours after the live event

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DVD (Slide Presentation with Audio) $97.00 plus $9.45 S&H
Available ten business days after the live event

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Registration Plus Recorded Event

Best value!

Live Webinar & Webinar Download $144.00

Includes Special Savings of $150.00 (through 09/22/17)

Live Webinar & Audio Download $144.00

Includes Special Savings of $150.00 (through 09/22/17)

Live Webinar & DVD $144.00 plus $9.45 S&H

Includes Special Savings of $150.00 (through 09/22/17)


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Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Early Registration
Discount Deadline
September 22, 2017
(about 9 hours)

or call 1-800-926-7926

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EA Credit

Strafford is an IRS approved continuing education provider and this course is approved for 2 enrolled agent (EA) credit hours.

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Customer Reviews

I liked the concentration on specific issues and examples.

Edita Rimalovsky

Komisar Brady & Co.

Excellent seminar! It was efficient and the important topics were covered at just the right pace; no time was wasted covering information that the participants already knew.

Rhonda G. Williams, CPA

Barraclough & Associates

I liked the fact that there was more than one person presenting the material. It's nice to hear multiple perspectives.

Matt Bristow

Cover & Rossiter

I appreciated the flow of the information offered and the ease at which I could follow the handouts.

Larry Bruck

WISS & Company

The conference was technical, informative and presented at a good pace.

Krystal Ching


or call 1-800-926-7926

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