[Alberta's Child]

I do business in both the U.S. and Canada, and I've filed tax returns on both sides of the border. I'm curious to know what exactly a "passive foreign investment" is under the U.S. tax code, and what the punitive tax implications are.

1. Did you invest U.S. dollars in this fund, or Canadian dollars?

2. Have you been paid any dividends on this investment?

3. Have there been any capital gains reported within the fund?

[E. Pluribus Unum]

1. I invested US dollars.

2. No dividends have been paid to me thus far.

3. I don't know if there have been any capital gains reported by the fund. Here is their first quarter 2011 financial statement.

Here is some ancillary information I found:

Instructions for Form 8621

U.S. Tax Form 8621 For Shareholders of Passive Foreign Investment Companies