What is the PFIC tax rate?

Why the question has no single answer

A PFIC gain is not taxed at one rate. Under the default regime the gain is allocated back across every year you held the fund, and each of those years is taxed at that year's highest ordinary rate.

There is no capital-gains treatment and no offsetting deduction. Interest is then charged on the resulting tax, compounding daily at the IRS underpayment rate.

What an election changes

A mark-to-market election taxes the annual paper gain as ordinary income instead. A QEF election taxes your share of fund income each year.

Both change the mechanism and the timing. Neither converts the income into long-term capital gain.

The interest charge is the part people miss

The headline rate is only half of it. Because tax is computed as though it had been owed in each earlier year, interest accrues from those years. On a long-held fund the interest can rival the tax.

What to do next

This page explains a rule. It does not work out what you owe, and it is not US tax advice. Take your fund statements to a US CPA or an Enrolled Agent, because the analysis runs per fund, per year.