Taxation of Passive Foreign Investment Companies (PFIC)

What is a PFIC, and what should you do if you have one?

The PFIC rules were designed to catch passive investments placed into foreign corporations, but have caught unsuspecting taxpayers in recent years, such as start-up that earns interest on invested cash or an individual invested in a mutual fund.

This is a general summary of the PFIC regime. The underlying rules are complicated and there are other issues to consider.

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