Passive Foreign Investment Company Rules

Summary

This practice note discusses the passive foreign investment company (PFIC) rules. This practice note covers the three different regimes that potentially apply to PFICs and discusses how they may subject your clients to U.S. federal income tax. (State tax implications are outside the scope of this practice note.) This practice note concludes with a thorough examination of the reporting requirements under the PFIC regimes. This practice note has been updated for the changes to certain PFIC reporting as a result of proposed regulations under I.R.C. Section 951A issued in early 2022.