Why are PFIC rules important for holders of Canadian mutual fund?
Many American citizens living or working in Canada have invested in Canadian mutual funds – likewise, many Canadians who subsequently moved to the United States retained their Canadian mutual funds holdings. They likely are unaware of the PFIC rules. Consequently many American taxpayers holding Canadian PFIC have not met their reporting obligations. Not only that but PFIC investments are to be avoided since its taxation (with the exception of the QEF regime) is designed to be punitive. Read more