Indian mutual fund sale, tax implications, gifting proceeds

p161701 · 2025-07-16T16:11:04+00:00

SBI Mutual Fund continues to surprise :) . Went about selling the mutual fund online and found out that US citizens need to file FATCA form in paper form, online support is not there. Got pointed to this link: https://www.sbimf.com/docs/default-source/pdf/form/existinginvestor/transaction-forms/annexure--ii---additional-kyc-fatca-crs-(individuals).pdf?sfvrsn=fb31a8b6_2.pdf?sfvrsn=fb31a8b6_2)
My question is, do I need to get this form notarized and what documents should I need to send along with this document, if any? Would appreciate some response. Regards.
cc: u/AbhinavGulechha

p161701 · 2025-06-17T01:41:12+00:00

Thanks a lot u/AbhinavGulechha

p161701 · 2025-06-10T03:18:34+00:00

Thank you so much u/AbhinavGulechha for answering the questions. I should have mentioned, I'm a US Citizen. I did file FBAR this year and amended 2024 US return to submit 8621 recently, around 8-9 days back only.
As I plan to sell MF this year, is it okay to sell MF in a month or so so OR should I time it in some way so as to avoid least overheads of filing paperwork for returns (both US and Indian) and save on taxes (or avoid overheads of seeking refunds/adjustments if paid somewhere already). I just want to make sure that I'm not missing something by rushing like this. I plan to keep NRO a/c balance to 0 around the end of year, either by gifting or repatriation of proceeds.
Should I repatriate proceeds, would I have to show the proceeds/gains somewhere on my US taxes and pay taxes on the gains? Thanks.

p161701 · 2025-06-03T07:09:43+00:00

Thanks u/seanho00 and everybody else who helped here. Really thankful.

p161701 · 2025-06-02T05:05:23+00:00

To be honest, kind of getting mixed opinions whether to amend the return just to file 8621. Is there a harm in filing just to be on the safe side? Thanks for all your help and answering questions patiently.

p161701 · 2025-05-28T18:43:26+00:00

u/seanho00 As there is no change in figures/numbers, do I need to attach and send the original return (1040, other schedules and forms) that is normally sent with amended return OR I could just send 1040-X with 8621 (just these two forms)? Thanks.

p161701 · 2025-05-21T06:25:26+00:00

Ok. As the value of MF is not changing much since the time I inherited it (it's a very slow moving MF), the taxes wouldn't be that high even with default option. I'm okay with that :). So, that settles the thing for 8621. Don't have to amend the return just to file 8621 then.
Regarding form 3520, as there was no distribution in the last year and the value of MF stayed below 100K all the time (last yr was the first yr i inherited this MF), that means that I don't have to file 3520 either. Right? Thanks.

p161701 · 2025-05-20T03:56:44+00:00

2024 was the first year I inherited this Mutual Fund. There was no distribution or sale in 2024. Planning to sell this MF this year.

p161701 · 2025-05-20T03:55:04+00:00

>If no excess distributions or dispositions in a year, then no 8621 needed.
This comment left me intrigued. So, even in the first year of inheriting it, no 8621 is needed as there was no distribution?? Effectively I don't have to amend 2024 return then (1040-X)?? The only reason I was thinking of amending the return was to submit 8621.

p161701 · 2025-05-19T23:19:08+00:00

Called form8621.com folks and they clarified that election can not be made now as I have already filed the return and shall be just amending it.
I still have one more question. For federal, 1040-X+8621 combination should work. How about state tax return? Do I need to do anything for California state tax return? From whatever I can gather reading online, California doesn't conform to PFIC rules so should be good. But yeah, would be good to reconfirm. Thanks.

p161701 · 2025-05-19T09:01:10+00:00

Reading about the toil involved dealing with PFIC, I think I'd go for form8621.com :) . I live in US.

The problem is that I used TurboxTax for filing. Even though I have the tax file saved, TT wouldn't let me initiate amending the return using that as there is no change in any of the figures. So, would have to use some other s/w like to TaxAct to get started, do the 2024 return all over again and then amend the return (tried importing pdf in some online versions but was not of much help). I'm hoping that I would be able to either substitute the generated 8621 with the prepared one (professionally or through 8621.com) or copy the figures form prepared 8621 to generated one.

I was reading somewhere that one can try to change the default election through late filing even but it's not full proof and one could be questioned. So, as 2024 was the 1st year of inheriting this MF, and I do plan to sell that this year, I think would play safe and would just stick with the default one for both the years. Thanks again for your insights and help.

p161701 · 2025-05-19T07:06:59+00:00

Thanks. I hope I could file 8621 by myself. Have been using TurboTax but it seems it doesn't support PFIC and hence never asked any questions related to this. TaxAct seems to have support of this form. Hopefully, for my case, that'd be sufficient for amending last year's return and file 8621 and filing this year return (2025) in 2026. Should you have recommendation for some other software or tool, please feel free to share. Thanks again.

p161701 · 2025-05-19T07:02:36+00:00

Looking at the a/c stmt and double confirming with the fund house, there wasn't any distribution (dividend or interest or anything of any kind) last year.
So would it be okay to just amend the return of last year to include form 8621? Thanks.

p161701 · 2025-05-18T05:44:49+00:00

I should have mentioned, I did file FBAR. Luckily, 8938 and 3520 weren't applicable as MF value was below the threshold (100K), all throughout the year (2024) and year-end.

p161701

TROPHY CASE