Yes, you're correct. Under the de minimis rule, you are not required to file Form 8621 if your Passive Foreign Investment Company (PFIC) holdings remain below the threshold. However, Form 8938 has separate reporting requirements.
According to the IRS guidelines, Form 8938 is required if you hold specified foreign financial assets exceeding certain thresholds. These assets include foreign accounts, stocks, and interests in foreign entities. Since your PFIC is a foreign financial asset, it may need to be reported on Form 8938, even if Form 8621 is not required.
Regarding how to report it:
- If the PFIC is held within a foreign account, you may need to report the account itself rather than listing the PFIC separately.
- If the PFIC is not held within an account, then it should be reported as an individual asset.
The key factor is whether the PFIC is part of a foreign financial institution's account or a standalone investment. This determines how this should be reported.
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