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I've had to file an extension for more time to the IRS; in order
to figure out how to go about completing Form 8621 correctly. I
can't afford a tax accountant or anyone else to help me; but i'm
pretty sure i know what i'm doing - but seeing how this is my
1st time filing for dividends received from a foreign company or
better known as PFIC, i though i could pass what i've done so
far on Form 8621 by you & see what you think.

Form 8621

On Part One i checked box A. "Election To Treat the PFIC as a QEF"

Its only in Part Two, lines 1a through 2c; which i'm not
to sure of myself if i'm putting the amounts in the right
place. The PFIC Annual Information Statement, which shows a simple
step by step way of filing out the amounts needed on Form
8621 seem simple enough to me; but still i'm not to sure.

If anyone has Form 8621, & understands what i'll place
below, i'm sure i'll receive an easy answer to my questions.

The company is (NAT) Nordic American (but you really don't
need to know that)

FACTS TO KNOW:
Bought 100 shares on May 9, 2002, at $14.10 per share
Total Days Held: 235
I received only two dividends= $90.

Since i only owned the shares in the PFIC only a certain
amount of days in 2002'; i followed the instructions for
just that.

FOR THE PRO RATA SHARE OF ORDINARY EARNINGS:
Part Two
(a) If you did not own Nordic shares for the entire period
January 1st - & ending 12/31/2002', multiply the # of shares
owned by $0.634619, divide the result by 365, & multiply
by the number of days held in 2002'.

100 shares X $0.634619= 63.4619 divided by 365= 0.1738682
0.1738682 X 235 Days Held= 40.859027

Pro Rata Share of Ordinary Earnings = 40.86 I'm fairly
sure this is correct. And i thought that this amount
would be entered on line 1a under pro rata share of
the earnings of the QEF; but i had second thoughts when
i went to compute how much of the dividends paid was the
Return of Capital.

I don't know if the amount of pro rata share & the amount
for the Return of Capital should be added together or not?

FOR RETURN OF CAPITAL:

The total amount of the distributions exceeded the sum of
Nordic's earnings & profits for the Taxable Year & Nordic's
earnings & profits accumulated in prior years. Accordingly,
47.01% of each distrubution is a dividend, and 52.99% of
each distribution is a return of capital.

Total dividends received 90 X 47.01% = 42.309
and 42.309 X 52.99% = 22.419539

Total Return of Capital is: 22.42 Correct?

Question: Now; i'm not sure what or where i'm suppose to
put the amount i have for return of capital. Should i add
it to the amount that i have above for pro rata share in
Part Two 1a., or put it on one of the lines below??

Part Two:
1b. Enter the portion of line 1a (pro rata share) that is
included in income under section 551 or 951 or that may be
excluded under section 1293(g)_________ (I don't have sections
551 or 951 or know what section 1293(g) is about!

1c. Subtract line 1b from line 1a. Enter this amount on
your tax return as dividend income.____________

2a. Enter your pro rata share of the total net capital
gain of the QEF._______

2b. Enter the portion of line 2a that is included in income
under section 551 or 951 or that may be excluded
under section 1293(g)._______

2c. Subtract line 2b from line 2a. This amount is a net
long-term capital gain. Enter this amount in Part Two
of the Schedule D used for your incom tax return.

ANYONE WORK FOR IRS OUT THERE WORK FOR IRS?
I sure hope someone knows what i'm talking about. Or i'll
just have to go to the IRS Bldg. on Monday & see if
they have the above mentioned sections, or if they can
answer my questions. Or i could just fill in lines 1a
& 1c with 40.86; which i believe is correct & currently
have written down there now.

Thanks in advance for your feedback! captbuddha







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