Under the asset test
, a foreign corporation will be deemed a PFIC if more than 50% of its assets produce, or are held for the production of, passive income.
The asset test
is cumbersome because corporate taxpayers must periodically analyze the assets of their foreign subsidiaries to see if such subsidiaries meet the definitional test.
In addition, the asset test
should be based on asset values as of the year end preceding the testing year.
In effect, the shareholder is subject to the PFIC rules even if the foreign corporation no longer meets either the passive income or the asset test
Alternatively, the so-called asset test
for determining PFIC status should be refined to ameliorate the heavy compliance burdens imposed by the unexpectedly broad PFIC rules.
856(c)(4) asset test
, REIT status is nevertheless preserved, according to Sec.
amounts paid to create a package design, computer software or an income stream from the performance of services under a contract; product launch costs; and stock lifting costs) are expressly excluded from the scope of the separate and distinct asset test
, taxpayers and advisers must be mindful of the regulations' retention of the test.
The notes, which represent the company's first offering with an investment-grade rating from three NRSROs (Nationally Recognized Statistical Rating Organizations) (Fitch upgraded iStar to 'BBB-' on July 29, 2002), have a minimum unencumbered asset test
requiring that the company maintain unencumbered assets totaling 120% of unsecured indebtedness.
1297(a), either a passive income or passive asset test
for any tax year.
Pursuant to a waiver dated March 22, 2002 granted by the Stock Exchange, a summary of which is set out in the Company's announcement dated March 25, 2002, instead of the net asset test
and consideration test under Chapter 14 of the Listing Rules, in respect of the Company, the tests for determining notifiable transactions (except for connected transactions or share transactions) of the Company may be calculated by reference to the ATKs for aircraft being acquired by the Company as compared to the Company's aggregate fleet ATKs.
1297(a)(2) asset test
if 50% or more of its assets generate passive income.
Liquidity facilities may be subject to an eligible asset test
such that liquidity providers may not be required to fund against assets initially rated 'AA-' or higher which are subsequently downgraded to 'CCC-' or lower in a single rating action.