Three years later, the Treasury and the IRS issued final regulations (TD 9806, Definitions and Repotting Requirements for Shareholders of Passive Foreign Investment Companies
) that provided further definitive guidance on determining ownership of a PFIC and on certain mandatory annual reporting requirements for shareholders of PFICs to file Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund.
He counsels clients on matters involving controlled foreign corporations, passive foreign investment companies
, effectively connected income, unrelated business taxable income, and income tax treaties.
persons investing in passive foreign investment companies
The IRS suspended FATCA (Foreign Account Tax Compliance Act) information reporting requirements for certain individuals with foreign assets and shareholders of passive foreign investment companies
(PFICs) under IRC [section][section] 6038D and 1298(f) (Notice 2011-55).
Under Internal Revenue Code section 904(d)(1)(E), dividends paid by 10/50 corporations that are not passive foreign investment companies
(PFICs) are treated in the aggregate as a separate category of income and are placed in this basket.
Alternatives to investing in ADRs include international or global mutual funds, passive foreign investment companies
, international exchange-traded index funds, and single-country index funds.
* Treatment of certain passive foreign investment companies
Those areas identified in 1996 and subsequently addressed by Congress include: overlap of the Controlled Foreign Corporation (CFC) and Passive Foreign Investment Companies
(PFIC); the non-controlled section 902 foreign tax credit basket; the excess passive asset rule in Section 956A and the subpart F treatment of active financial services income.
There are, however, already two overlapping sets of anti-deferral rules -- one that was enacted in 1962 called Subpart F and the second, relating to "passive foreign investment companies
" (PFICs), which was enacted in 1986 to do the very thing the President's proposal is intended to do: end the deferral of tax on passive assets.
To complicate matters further, many foreign pension plans are invested in passive foreign investment companies
(PFIC) and may be subject to the additional filing requirements of Form 8621.
1411 to income recipients for charitable remainder trusts with income from controlled foreign corporations or passive foreign investment companies
but allow the use of the simplified method that was included in the 2012 proposed regulations for these purposes.
He advised both National Office attorneys, IRS field attorneys, and attorneys in the Department of Justice on a broad range of international issues including foreign tax credits, foreign currency issues, subpart F and passive foreign investment companies
, dual resident companies, hybrid financial instruments, partnership allocation issues and many other matters.