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New Guidance Regarding Ownership of Passive Foreign Investment Companies  

Author:  Andrew P. Solomon.; David C. Spitzer.; Isaac J. Wheeler.; S. Eric Wang.

Source: Volume 31, Number 03, Spring 2014 , pp.43-52(10)

Journal of Taxation of Investments

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The Internal Revenue Service and Treasury Department have issued temporary and final regulations providing guidance on the ownership of “passive foreign investment companies” and implementing an annual reporting requirement for shareholders of such companies. The regulations, which replace and expand certain provisions of regulations that had been proposed over two decades ago, are effective as of December 30, 2013—the day they were issued. This article describes and analyzes those regulations.

Keywords: PFIC; controlled foreign corporation; CFC; shareholder; attribution; trust; reporting; Form 8621; Form 5471

Affiliations:  1: Sullivan & Cromwell LLP; 2: Sullivan & Cromwell LLP; 3: Sullivan & Cromwell LLP; 4: Sullivan & Cromwell LLP.

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