Fairfax India Trading Block

[Jurgis]

Jurgis- Right now, you can't buy FFXDF if you reside in the United States. However, you can buy FIH.U . You have to open an extra account with Fidelity.

Thanks. My edit was correct then. 

[My Own Personal Hedge Fun]

Curious if anyone knows more about this? I am blocked even for sell transactions (and frankly, I'd like to reduce this position). It's unusual to be blocked for sell orders. I would try selling directly on the Toronto exchange, but Fidelity doesn't allow International trading for IRAs.

[tradevestor]

I tested by placing a limit order at a high price (I don't intend to sell now) and it said to call Fidelity representative.  Did you try calling them?

[vinod1]

Not related to trading limitations but isn't Fairfax India considered PFIC? I never looked into it because of that.

Thanks

Vinod

[Jurgis]

Not related to trading limitations but isn't Fairfax India considered PFIC? I never looked into it because of that.

Thanks

Vinod

Sure it's very likely PFIC. Only matters if you hold it in taxable accounts. Does not matter if you hold it in IRA.

[vinod1]

Not related to trading limitations but isn't Fairfax India considered PFIC? I never looked into it because of that.

Thanks

Vinod

Sure it's very likely PFIC. Only matters if you hold it in taxable accounts. Does not matter if you hold it in IRA.

Thanks! Did not know that. I tried to read up on this but not many links other than an EY document. I would research this  more. Do you think it is a pretty straightforward one that it is not taxable in a 401k or a Rollover IRA?

Vinod

[Jurgis]

Not related to trading limitations but isn't Fairfax India considered PFIC? I never looked into it because of that.

Thanks

Vinod

Sure it's very likely PFIC. Only matters if you hold it in taxable accounts. Does not matter if you hold it in IRA.

Thanks! Did not know that. I tried to read up on this but not many links other than an EY document. I would research this  more. Do you think it is a pretty straightforward one that it is not taxable in a 401k or a Rollover IRA?

Vinod

I believe that PFICs are not an issue in IRAs and likely 401(k)s.
But I'm not a tax professional. I am just random guy on the Internet. Please verify this with real tax professional.

[My Own Personal Hedge Fun]

From https://www.irs.gov/instructions/i8621

"Passive Foreign Investment Corporation (PFIC)

Generally, a U.S. person that is a direct or indirect shareholder of a PFIC must file Form 8621 for each tax year....

...However, a U.S. person that owns stock of a PFIC through a tax-exempt organization or account described in the list below is not treated as a shareholder of the PFIC.

An organization or an account that is exempt from tax under section 501(a) because it is described in section 501(c), 501(d), or 401(a).
A state college or university described in section 511(a)(2)(B).
A plan described in section 403(b) or 457(b).
An individual retirement plan or annuity as defined in section 7701(a)(37).
A qualified tuition program described in section 529 or 530.
A qualified ABLE program described in section 529A."

[My Own Personal Hedge Fun]

I tested by placing a limit order at a high price (I don't intend to sell now) and it said to call Fidelity representative.  Did you try calling them?

I did last year, but got someone who wasn't interested in really finding an answer, probably because I phrased my question as a theoretical "what happens if I want to sell?" I figured it would be a temporary issue, so I didn't push much either.

[vinod1]

Jurgis & MOPHF,

Thanks for the info.

So it looks like neither 401k or an IRA is directly mentioned by IRS as being exempted. I will post if I find any confirmation.

Vinod