Regulated Investment Company

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Regulated investment company

An investment company allowed to pass capital gains, dividends, and interest earned on fund investments directly to its shareholders so that it is taxed only at the personal level, and double taxation is avoided.

Regulated Investment Company

An investment company that does not pay taxes on its earnings. Mutual funds and closed-end investment companies are both regulated investment companies. RICs are able to escape corporate taxes because they profit from investments by shareholders and do not have any real operations. They are therefore able to pass profits to shareholders and avoid double taxation. In order to qualify as an RIC, a company must derive at least 90^ of its profits from investment activities.

regulated investment company

An investment company that meets certain standards and, as a result, does not have to pay federal income taxes on distributions of dividends, interest, and realized capital gains. Essentially, this income is passed through to the stockholders, who, in turn, are taxed. To qualify as a regulated investment company a firm must derive at least 90% of its income from dividends, interest, and capital gains. It also must distribute at least 90% of the dividends and interest received. It must have a minimum diversification of its assets.

Regulated Investment Company (Mutual Fund)

A company or trust that uses its capital to invest in other companies. The two principal types are closed-end and open-end mutual funds. Shares in closed-end mutual funds, some of which are listed on stock exchanges, are readily transferable on the open market and are bought and sold like other shares. Open-end funds sell their own new shares to investors, stand ready to buy back their old shares, and are not listed.
References in periodicals archive ?
In addition to the quarterly distributions, and in accordance with the minimum distribution requirements of the Internal Revenue Code for regulated investment companies, the Fund may pay an adjusting distribution in December which includes any additional income and net realized capital gains in excess of the quarterly distributions for that year.
It currently serves 21 per cent of the listed Co-operative Insurance segment for Saudi Arabia and 13 per cent of the CMA licensed and regulated Investment Companies.
In order to qualify for the favorable tax treatment generally available to regulated investment companies, the Fund must satisfy certain income and asset diversification requirements each year.
8226; Establishments of controlled foreign corporations to gain commodity exposure without failing the IRS qualifying income requirement for regulated investment companies
2009-42, the IRS has outlined a safe harbor for regulated investment companies (RICs) for purposes of the Sec.
44 The FIE Rules provide for special exemptions from the tax avoidance motive test for certain NREs (including Regulated Investment Companies and Real Estate Investment Trusts as defined under the U.
Corporations which have been DISC or regulated investment companies, real estate investment trusts and other such entities also do not qualify under Sec.
Form 1120-RIC is the annual tax return for regulated investment companies.
Other sources of the upward revisions included the following: In wages and salaries, the inclusion of wages and salaries of students working for public educational institutions and of other State and local government employees not covered by unemployment insurance; in other labor income, the revisions in the employer contributions to private group health insurance; in nonfarm proprietors' income, the revisions in the interest passed through by partnerships to their partners; in personal dividend income, the recognition of capital gains distributions of regulated investment companies as dividends; and in personal interest income, the revisions in imputed interest income included in personal income and the recognition of interest paid by persons to government.
The Securities and Exchange Commission (SEC) has issued a number of guidelines over the years in an attempt to regulate derivative use in regulated investment companies.
It expands on how the new legislation requires regulated investment companies to conform to, and interact with, other aspects of the tax code and applicable federal securities laws.
These items--interest distributed by regulated investment companies and disability income payments--are in lines 20 and 21, respectively, in each of the tables.

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