Yes, this income will need to be reported on Form 8621. Form 8621 is not supported in TurboTax. Click here for the 8621 Form: https://www.irs.gov/pub/irs-pdf/f8621.pdf
The easiest way to include this is to print and fill the form out by hand, attach it to your 1040 and mail it to the IRS. Please see article below for 8621 instructions: https://ttlc.intuit.com/replies/6114657
