Tag: PASSIVE FOREIGN INVESTMENT COMPANY
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Understanding Passive Foreign Investment Companies (PFICs)
A Passive Foreign Investment Company (PFIC) is a foreign corporation subject to strict tax laws, defined by its income and asset criteria. A PFIC must derive 75% or more of its income from passive sources or have 50% of its assets in investments producing passive income. U.S. investors are required to report earnings from PFICs…