Sec. 856(n)(1)(a) specifies that passive foreign exchange gain (as defined in Sec. 856(n)(3)) for any tax year is not gross income for purposes of Sec. 856(c)(2).
A change to the Code limits the ability of shareholders of certain foreign insurance companies to avoid being subject to antideferral rules that apply to passive foreign investment companies.
This article focuses on the mechanics of the “cleansing” process and the associated advantages and potential pitfalls.
Proposed regulations would clarify the circumstances under which investment income a foreign insurance company earned is derived in the active conduct of an insurance business for determining whether the income is passive income, and thus the extent to which the company's assets are treated as passive assets in determining whether the company is a passive foreign investment company.
Proposed regulations would clarify the circumstances under which investment income earned by a foreign insurance company is derived in the active conduct of an insurance business for purposes of determining whether the income is passive income.
The IRS announced that it will amend the Sec. 1298(f) regulations to create an exception from its filing requirements for U.S. persons holding passive foreign investment company (PFIC) stock that is marked to market under Sec. 475 or another Code section other than Sec. 1296.
This item summarizes the aspects of the net investment income tax that are most relevant to hedge fund investors and general partners.
The IRS announced that it will amend the regulations governing the reporting requirements for U.S. persons who hold stock in passive foreign investment companies.
Draconian penalties of the PFIC rules may risk pushing U.S. investors toward missing the proverbial "information age" boat.
In enacting the PFIC rules in 1986, Congress created a complex and punitive tax regime for certain passive foreign investments that continues to plague U.S. taxpayers and their tax advisers.
As the workforce becomes more mobile, many non-U.S. citizens who become U.S. residents for work reasons have to deal with not only cultural adjustments but also the unanticipated workings of the PFIC tax regime.
PFIC investors should be aware of new PFIC reporting requirements and should be alert to developments that may affect them.
This item assesses various planning alternatives that may help U.S. taxpayers avoid the negative aspects of the PFIC regime, including qualifying electing funds, mark-to-market elections, and various planning strategy options.
The IRS announced that it is suspending the information reporting requirements for certain individuals with foreign assets and shareholders of passive foreign investment companies (PFICs) under Secs. 6038D and 1298(f) (Notice 2011-55)
Letter Ruling 200943004 provides helpful insight into IRS thinking with respect to the application of the PFIC/CFC overlap rule in the partnership context.
This article explores the tax consequences of using an offshore company to make more significant investments in foreign businesses, including situations in which the use of an offshore holding company may be consistent with bona fide U.S. federal income tax planning objectives.