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Subject:  Foreign Investments & Form 8621 Date:  4/27/2003  8:27 PM
Author:  captbuddha Number:  65195 of 131274

I posted a request for Help/Assistance on the subject
earlier, but got no reply, so i thought i'd try again
but this time make my question easier to understand.

I'm confused about what to do in Part Two of Form 8621:

"Return by a Shareholder of a Passive Foreign Investment Company or Qualified Fund"

I'll just explain the facts Re. one of
the foreign co.'s:

The co. is:
(NAT) Nordic American Tanker Shipping Limited
Bought 100 shares on May 9, 2002' at $14.10 per share
Held 235 Days in 2002'
Received only two dividend distributions = $65

Form 8621
Part Two

(1a)I found it easy to compute & come up with the amount
of the Pro Rata Share of the Ordinary Earnings of
the QEF needed for line 1a

Its line 2a that is confusing to me!
"Enter your pro rata share of the total net capital" ______

To compute/find the amount for line 2a the instructions
in "PFIC Annual Information Statement" that was sent too me by the foreign companies, states:

The total amount of the distributions
exceeded the sum of Nordic American's earnings & profits
for the Taxable Year & Nordic Americans's earnings & profits
accumulated in prior years.
(Here comes the part where i get confused). Accordingly, 47.01% of each distribution is a dividend, and 52.99%
of each distribution is a return of capital.

Now; the total amount of distributions that i received
from Nordic in 2002' was two payments = $65

So; to get the figure i need for the pro rata share of the
total net capital gains of the QEF on line 2a of the
Form 8621 -- I need to do what??

Should i do the following:

$65 X 47.01% = 30.5565 X 52.99% = 16.191889

Is 16.19 the pro rata share of the total net
capital gain of the QEF??

Or is it:

$65 X 52.99% of each distribution is a return of capital
= 34.4435

Is 34.44 the pro rata share of the total net
capital gain of the QEF??

**** The instructions (too me) seem to be saying two
things at once in that last sentance; i'm not sure how
to come up with that pro rata share of capital gains!!!!

CAN ANYBODY HELP??????? Thanks Capt!

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