Removing PFIC Taint on Foreign Investments Through Subsequent Year QEF Elections
Navigating PFIC Rules of IRC Sections 1291-1298
Recording of a 90-minute premium CLE/CPE webinar with Q&A
This webinar will provide tax attorneys and counsel with a practical guide to removing the “taint” of foreign investments that are treated as passive foreign investment companies (PFICs). The panel will discuss the complex qualified electing fund (QEF) election rules, detailing the advantages, disadvantages and calculations involved in making a QEF election, and will discuss the planning opportunities in electing out of PFIC treatment.
Outline
- Code Provisions governing PFIC treatment, purging and deemed distribution rules
- Section 1291 default treatment
- Section 1295 QEF provisions
- Section 1296 mark-to-market option
- Section 1298 special rules
- Ownership rules
- When PFIC shares are owned by pass-through entity
- When PFIC shares are owned by a trust or estate
- Rules when a foreign corporation or entity is classified as both a PFIC and a controlled foreign corporation
- Purging elections to remove PFIC “taint”
- Making election in year of purchase
- Making election in a subsequent year after initial purchase
- Mark-to-market elections
- Entity classification elections
Benefits
The panel will discuss these and other important issues:
- Identifying assets that qualify as PFIC holdings
- Differentiating tax results between PFIC, mark-to-market and QEF scenarios
- Assessing the tax impact of a QEF election in a year subsequent to acquisition of the PFIC stock
Faculty
Stephen Ziobrowski
Partner
Day Pitney
Mr. Ziobrowski practices in the area of tax planning for businesses and individuals. On the business side, he advises... | Read More
Mr. Ziobrowski practices in the area of tax planning for businesses and individuals. On the business side, he advises clients on business formations, reorganizations, spin-offs, sales and liquidations, and equity-based compensation plans, including qualified and nonqualified stock options. He also does tax planning for S corporations, partnerships, and limited liability companies in various business ventures. On the individual side, he advises clients on like-kind exchanges, alternative minimum tax, international tax issues, and other tax matters. He is a frequent lecturer at seminars and continuing education programs for lawyers and accountants.
CloseCarl A. Merino
Counsel
Day Pitney
Mr. Merino represents U.S. and non-U.S. families and companies on a wide range of personal and business tax... | Read More
Mr. Merino represents U.S. and non-U.S. families and companies on a wide range of personal and business tax matters, including cross-border income and estate tax planning, corporate and partnership tax issues, S corporations and income taxation of trusts and estates. He works extensively in the international tax arena. He advises non-U.S. clients on structuring inbound investments to minimize federal and state income and estate tax exposure. He advises U.S. clients on tax aspects of foreign investments, including anti-deferral rules, entity classification issues and reporting requirements for foreign entities and trusts. His work in this area also encompasses pre-immigration and expatriation planning, tax issues of foreign trusts with U.S. beneficiaries, cross-border compensation and employment tax issues and corporate structuring for foreign companies setting up U.S. operations.
ClosePatrick J. McCormick, J.D., LL.M.
Kulzer & DiPadova
Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting... | Read More
Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting obligations. He published national articles and given numerous national and local presentations on assorted areas of tax and estate planning law, including international tax and offshore compliance issues. His latest article on PFICs is titled Tax Reporting Implications of Foreign Mutual Funds. He is licensed to practice in the States of New Jersey, Florida, and Georgia, and the Commonwealth of Pennsylvania.
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