Description of Proposed Amendment to H.R. 4333 As Amended Jcx-15-88
Description of Proposed Amendment to H.R. 4333 As Amended Jcx-15-88
United States. Congress. Joint Committee On Taxation
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Election to be a qualified electing fund in a passive foreign investment company (PFIC) Present Law The election to treat a passive foreign investment company (PFIC) as a qualified electing fund can be made only by the PFIC. To make the election, the PFIC must agree to such requirements as are prescribed by regulation that determine the income of the company, the ownership of the company's outstanding stock, and other information necessary to carry out the purposes of the PFIC provisions. Quali...fied electing fund status is important in determining whether any gain derived by (and, in some cases, distributions received by) U.S. investors is subject to deferred tax and interest. For example, a U.S. investor in a PFIC that has been a qualified electing fund for all of the years beginning after 1986 in which the company was a PFIC, and that include any portion of the investor's holding period, can dispose of his or her investment without the gain being subject to deferred tax and interest.
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