Streamline Procedure PFIC Market-to-Market purging procedure necessary?
Hello,
here is another case of a US citizen living abroad, investing in ETFs and now trying to clear the situation and get compliant. I have some questions for my situation:
I invested in 3 different ETFs in 2022 and now trying doing the streamline procedure, so I have to file the years 2023,2024 and 2025. As I am a still student and had a very small income in the past years, I wanted to sell my ETFs this year and use the market to market election. If I understood it correctly the gain for each year will count as ordinary income, which would be very beneficial due to my low / non existent income in the past years. Next year I expect to have a higher income, so I hope to get out of this mess before it gets really expensive.
The rules state, that a purging election is necessary if you did not make to MTM election in the first year of owning. Does anybody know, if this is the case for me? I am not sure how that would be interpreted with the streamline procedure, as I did not file anything in the first year of owning the PFIC.
Thank you in advance, I would be really happy if anyone could answer my question.