Other Anti-Deferral Provisions Tx 8300. Learning Objectives. Explain the reason for FPHCs, PFICs, and QEFs Identify PFICs Calculate the tax and ________ charges resulting from PFIC status Explain the benefits of _____ Define FPHCs Explain how the FPHC provisions curb tax _________.
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You should be able to:
Foreign __________ companies usually are PFICs. Also, foreign _________ companies are vulnerable when they:
Experience operating ______
Possess ___ business assets
________ large holdings
Three NRAs and ___ U.S. citizens own equal amounts of TourCo. Sixty percent of TourCo’s assets earn passive income, and ___% of TourCo’s income is passive. Under what conditions does TourCo avoid PFIC status?
Non-Excess Portion is _______ Gross Income
in Prior __ Years
- ____% x
Gross income if allocable to:
Allocated Over _______ Period
Pre-19___ years, or
Days before ____ status
Used to calculate ________ ___ ______
______ distribution allocable to post-1986 PFIC years other than _______ year times ___ statutory rates
Aggregate Increases in _____
Deferred Tax Amount
Interest on “aggregate increases in taxes” using rate _____ points higher than Federal _____-term rate
Aggregate Amount of ________
On 1/1/01, DomCo bought all shares in a PFIC. The PFIC paid cash dividends to DomCo as follows:
$10,000 on 12/31/01
$10,000 on 12/31/02
$11,000 on 12/31/03
$12,000 on 12/31/04
$______ on 12/31/05
Assume the top corporate tax rate is ___% and the applicable interest rate is ___%. Calculate the deferred tax amount in 2005.