For Tax Professionals  
T.D. 8701 March 11, 1997

Treatment of Shareholders of Certain Passive
Foreign Investment Companies

[4830-01-u] DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1 and 602 [TD 8701] RIN 1545-AC06

TITLE: Treatment of Shareholders of Certain Passive Foreign Investment Companies

AGENCY: Internal Revenue Service (IRS), Treasury

ACTION: Final and temporary regulations.

SUMMARY: This document contains final regulations that provide rules for making the deemed sale and deemed dividend elections under section 1291(d)(2). These regulations reflect changes to the law made by the Tax Reform Act of 1986 and the Technical and Miscellaneous Revenue Act of 1988, and apply to a shareholder of a passive foreign investment company (PFIC) that elects under section 1295 to treat the PFIC as a qualified electing fund (QEF) for a taxable year after the first taxable year during the shareholder's holding period that the foreign corporation was a PFIC.

DATES: These regulations are effective December 27, 1996.

APPLICABILITY: For the specific dates of applicability, see  1.1291-9(k) and 1.1291-10(i).

FOR FURTHER INFORMATION CONTACT: Gayle Novig, (202) 622-3880 (not a toll-free number).

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