Yes. You're correct that unreversed inclusions cannot be negative. This means that previously taxed unrealized gains cannot be used to offset future losses.
However, if your current unrealized gain is still below your original purchase price, you may not have ordinary income from the gain. Instead, the cost basis is preserved, and only gains exceeding prior inclusions would be taxable.
PFIC dividends are generally reported as ordinary dividends on Form 1099-DIV, similar to domestic dividends. if you took a QEF election, the dividends can be taxed at the capital gains rate.
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