8621 MTM election for first year U.S. person

[polohan]

I just turned into U.S. person (RA) for the first time in 2022 and I owned some PFIC which means I need to file 8621.

Based on my research, on the first year of doing 8621, we can do a Mark-to-market (MTM) election which is supposed to make the 8621 easier to fill out and also paid less taxes? Is this the correct understanding?

Secondly, if say I have a foreign bund that I bought back in the middle of 2021 for $1000. At 1/1/2022 it's worth $1200 and at 12/31/2022 it's worth $1500. What should be the adjusted basis for it under MTM?

Thank you all for any comments in advance

[Donatien]

I recommend you to read meticulously the code relative to section 1296

USCODE section 1296

https://www.govinfo.gov/app/details/USCODE-2021-title26/USCODE-2021-title26-subti[product key remove...

https://www.govinfo.gov/content/pkg/USCODE-2021-title26/html/USCODE-2021-title26-subti[product key r...

AND also to read the the REGULATIONS section 1.1296-1

https://www.govinfo.gov/content/pkg/CFR-2022-title26-vol13/xml/CFR-2022-title26-vol13-sec1-1296-1.xm...

good luck with that. It is the clearest information you will find besides a very expensive and difficult to find and busy international tax professional. only reading this will help you understand the form instructions.