PFIC (Passive Foreign Investment Company)

U.S. persons may pay taxes more than usual if invested in PFICs. A foreign corporation is a PIFC if 75% of the corporation’s income is passive, or 50% of the corporation’s assets are held for production of passive income. Foreign private equity funds are PFICs. Foreign ETF, mutual funds, index funds could be PFICs. If proper elections neither available nor timely made, growth in PFICs may be subject to the highest rate of tax beyond the favorable qualified dividends and capital gain tax rate. Choi & Partners help you:

  • Evaluating PFIC tax risks and alternatives
  • Guiding PFIC administrators to provide QEF information to investors
  • Structuring PFIC to avoid unfavorable tax result