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ARTICLE · 21 JANUARY 2017

Final Regulations Released Regarding PFIC Ownership Determination and Annual Reporting Requirements

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On December 27, 2016, the Treasury Department (Treasury) and Internal Revenue Service (IRS) released final regulations regarding the determination of ownership of a passive foreign investment company ("PFIC") and regarding certain exceptions to the annual PFIC reporting requirements (the "PFIC Regulations").

United StatesFinance and Banking
Richard M Corn
Richard M Corn
Michael Fernhoff
Michael Fernhoff
Abraham Gutwein
Abraham Gutwein
Martin Hamilton
Martin Hamilton
Anne Kim
Anne Kim
David S. Miller
David S. Miller
Amanda Nussbaum
Amanda Nussbaum
Amy Drais
Amy Drais
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On December 27, 2016, the Treasury Department (Treasury) and Internal Revenue Service (IRS) released final regulations regarding the determination of ownership of a passive foreign investment company ("PFIC") and regarding certain exceptions to the annual PFIC reporting requirements (the "PFIC Regulations"). The PFIC Regulations adopt, with certain changes, proposed regulations  published on December 31, 2013 (also released as temporary regulations), implement certain guidance initially set forth in Notice 2014-28 and Notice 2014-51 and remove the corresponding temporary regulations.

Determination of Ownership of a PFIC

The PFIC Regulations revise rules initially set forth in proposed regulations released in 1992 (withdrawn and reissued as the 2013 temporary regulations) regarding when a U.S. person who directly or indirectly owns 50 percent or more in value of the stock of a foreign corporation that is not a PFIC is considered to own a proportionate amount (by

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