Tax
PFIC Rules on Indian Mutual Funds: Why They Hurt
Indian mutual funds, ULIPs, and many Indian investment products are PFICs under U.S. tax law, and PFIC tax is brutally punitive. Here's what to do.
1 / 5
What Makes Something a PFIC
- Passive Foreign Investment Company (PFIC) test: foreign corporation where (a) 75%+ of gross income is passive, OR (b) 50%+ of assets produce passive income.
- Virtually all foreign mutual funds, including Indian mutual funds, qualify as PFICs.
- Most foreign hedge funds, foreign ETFs, foreign life insurance with investment components: also PFICs.
- Holding even ONE share triggers PFIC reporting (Form 8621).
Use ← → keys or swipe on mobile
Educational content, not tax, legal, or accounting advice. Confirm with a CPA before acting.
You might also like
Accounting
Accrual Accounting: When to Switch From Cash Basis
Cash basis is simple but lies about timing. When accrual accounting is required, when it is simply the smarter call, and exactly how the switch works.
Accounting
Month-End Close Checklist for Small Businesses
A repeatable monthly close cadence, what to reconcile, what to accrue, and how to know your books are actually done.
Payroll
Multi-State Payroll Setup for Small Businesses
One remote employee in another state means new tax registrations, withholding rules, and compliance work. Here's the playbook.
Educational content, not tax, legal, investment, or accounting advice. See our Terms.
Want a CPA to own your filings?
Federal, state, and local returns prepared and reviewed by a licensed CPA, with the planning done before year-end rather than after it.