Two significant tax acts affecting the federal tax treatment of
regulated investment companies (RICs) have been signed into law in
the past week.
First, the Tax Relief, Unemployment Insurance Reauthorization,
and Job Creation Act of 2010, signed into law on December 17, 2010,
to extend the "Bush tax cuts" for two years, contained
three extender provisions that relate specifically to foreign
investors in RICs. These consist of two-year extensions of the
withholding tax exemptions for RIC dividends attributable to
portfolio interest income from U.S. sources and for RIC dividends
attributable to short-term capital gains, which will now apply for
RIC taxable years beginning before January 1, 2012, and a two-year
extension of the look-through rule that provides generally that RIC
shares will be included in the gross taxable estate of a foreign
decedent only to the extent of the RIC's investment in U.S.
assets, which will now apply for individuals who die before January
1,
