Investment in Indian mutual funds and Form 8621

[ma2025]

Hi,

I invested in 4 Indian mutual funds in Sep 2025. My wife also invested in 4 other mutual funds in India. All mutual funds are traded in India and not available in US. For year ending on Dec 2025, we do not have any dividends and market value of most funds is less than purchase price. Total investment in 8 mutual funds is around USD $7,000.

For U.S tax returns -

1. Do we need to separately report holdings and unrealized gain/loss for each mutual fund?

2.  Do we need to file form 8621 for each mutual fund?

3. I believe that we will need to share this info for FATCA compliance (disclosure only, no tax impact). Please confirm.

Appreciate the support from experts.

[DaveF1006]

No, you do not need to report the separate holdings, or unrealized gains and losses for that amount. You don't need to file form 8621 unless you are a shareholder of a Passive Foreign Investment Company.  Please view this link for more details.

You won't have a FATCA reporting requirement unless the total value of your specified foreign financial assets is more than $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year. See the Fatca reporting instructions.

[ma2025]

Hi DaveF1006,

Thanks for your reply.

Mutual funds from India are considered PFIC. What about this requirement for form 8621?

• Are reporting information with respect to a QEF or section 1296 mark-to-market election.

Thanks

[DaveF1006]

According to IRS Instructions for 8621, a U.S. person that is a direct or indirect shareholder of a PFIC must file Form 8621 for each tax year under the following five circumstances if the U.S. person:

1. Receives certain direct or indirect distributions from a PFIC,
2. Recognizes gain on a direct or indirect disposition of PFIC stock,
3. Is reporting information with respect to a Qualified Electing Fund (QEF) or section 1296 mark-to-market election,
4. Is making an election reportable in Part II of the form, or
5. Is required to file an annual report pursuant to section 1298(f). See the Part I instructions, later, for more information regarding the person that must file pursuant to section 1298(f).

It sounds like you are receiving distributions from the fund so you would need to file 8621 with your return. As far as determining the QEF or section 1296 market-to-market election, this would be information should be disclosed to you by your investment broker because this information will be asked when you fill out your 8621.

TurboTax does not support Form 8621 but you may download a copy here.