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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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