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- What Is a Passive Foreign Investment Company (PFIC)?
A passive foreign investment company (PFIC) is a corporation that's located abroad and exhibits one of two conditions based on either income or assets
- Instructions for Form 8621 (12 2025) - Internal Revenue Service
A PFIC is a QEF if a U S person who is a direct or indirect shareholder of the PFIC elects (under section 1295 (b)) to treat the PFIC as a QEF and complies with the requirements described in section 1295 (a) (2)
- PFIC explained: What it is and how it affects US taxpayers
A passive foreign investment company (PFIC) is a foreign corporation that primarily generates passive income, such as dividends, interest, or capital gains, or holds assets that produce such income
- PFIC Rules for U. S. Investors: Reporting Requirements for Foreign Funds . . .
A PFIC is any non‑U S corporation that meets either the 75% passive income test or 50% passive asset test In practice, these rules often capture many foreign pooled investment vehicles, including foreign mutual funds and ETFs
- Understanding The PFIC Rules And Avoiding Expensive Tax Traps
To qualify as a PFIC under federal income tax law, a U S shareholder must have an interest in a foreign corporation that satisfies either an “income test” or an “asset test ”
- What’s a PFIC, Common Filing Examples and Explanations
Technically, the PFIC is an acronym for Passive Foreign Investment Company, and U S taxpayers worldwide (including U S Expats) who meet the reporting requirements, may have to report their PFICs on various international information reporting forms each year such as the FBAR and Form 8621
- PFIC Rules Explained (2026): Form 8621, Excess Distributions, QEF vs . . .
PFIC rules exist because U S persons could invest through foreign mutual funds offshore investment companies and defer U S tax for many years, which Congress viewed as unfair compared to investing in the same passive assets directly
- Passive foreign investment company - Wikipedia
PFIC status applies separately for each U S person owning shares, and also separately with respect to shares acquired at different times PFIC status does not, itself, have any impact on the foreign corporation or foreign shareholders
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