G Election Trues Up Timing to Recognize CFC & PFIC Income for Net Investment Income Tax

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The “G” election, provided for under U.S. Treas. Reg. Section 1.1411-10(g), impacts U.S. direct and indirect individual shareholders of controlled foreign corporations (“CFCs”) and passive foreign investment companies (“PFICs”). A U.S. individual shareholder of a CFC or PFIC with a qualified electing fund (“QEF”) election is required to report and pay U.S. federal tax on certain undistributed income from the CFC or PFIC/QEF. This undistributed income is generally treated as a deemed dividend inclusion, which is subject to both regular U.S. federal individual income tax and the net investment income tax.

The G election allows the U.S. individual shareholder of …read more

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