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 ?
Interest received from the fund of a regulated investment company that meets the 50% rule is exempt from New York State taxation to the extent that the interest is a percentage of the total distribution of the regulated investment company fund.
Finally, the series A preferred will be non-callable for five years from the date of issue, unless the company's board of trustees considers it necessary to redeem them during the 30-day period before each of 26 June 2015 and 26 June 2018, to maintain the fund's status as a regulated investment company.
Under this rule, continuity is adversely affected by pre-acquisition distributions made when (1) a regulated investment company (RIC) or real estate investment trust (REIT) acquires a corporation (which must distribute all non-RIC or non-REIT earnings and profits), (2) a C corporation acquires an S corporation (which commonly distributes its accumulated adjustments account (AAA)) or 0) there is an acquisition of a controlled foreign corporation (which commonly distributes its previously taxed income account on its subpart F income).
A third-party recordkeeper is defined as any (1) mutual savings bank, cooperative bank, domestic building and loan association, or other savings institution chartered and supervised as a savings and loan or similar association under Federal or state law, or bank or credit union, (2) consumer reporting agency, (3) person extending credit through the use of credit cards or similar devices, (4) broker, (5) attorney, (6) accountant, (7) barter exchange, (8) regulated investment company (RIC) and agent of such RIC when acting as an agent thereof and (9) enrolled agent.
1045(a) states that corporations are not eligible to make the election, the benefit of the rollover can flow through to shareholders of an S corporation or regulated investment company (e.g., a mutual fund).
1.865-1, the allocation of losses on the disposition of portfolio: stock, stock of a regulated investment company, S stock, and other personal property not governed by Prop.
Since beginning operations, Fund had elected to operate as a regulated investment company. Under the Act, each share of Fund was redeemable at the shareholder's request for its net asset value.
regulated investment company (RIC) or real estate investment trust (REIT), except that dividends paid by a REIT to a person other than an individual who beneficially owns less than 10% of the REIT are taxed at the U.S.

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