(Opalesque) U.S.-based venture capital and other funds that invest in foreign companies must be careful to avoid the passive foreign investment company (PFIC) rules, which could substantially increase the tax owed on exit for U.S. taxpaying investors. U.S. persons who are limited partners (LPs) of funds must also be aware of the PFIC rules, as they are liable for their own tax reporting and payment of taxes.
PFIC: what U.S. investment funds should be particularly aware of and newly proposed regulations
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