April 10, 1991
TO: ACCOUNTING/TREASURERS COMMITTEE NO. 6-91
RESPONDENTS TO EARLIER PFIC SURVEY
TAX COMMITTEE NO. 9-91
RE: INFORMATION FOR PFIC REVENUE ESTIMATE AND TO UPDATE SURVEY
__________________________________________________________
As you know, the Institute has been working to obtain
either a legislative or administrative solution to the problem
that arises when a regulated investment company ("RIC") invests
in shares of stock of an entity which is a "passive foreign
investment company", or "PFIC". Under current law, a RIC which
(1) sells a PFIC stock for a gain which it has held in more than
one tax year or (2) receives an "excess distribution" with
respect to the PFIC stock, will incur a RIC-level tax which
cannot be avoided by distributing the income or gain to
shareholders. Specifically, the Institute has proposed that RICs
mark to market their PFIC stock each year and distribute any
recognized gain to shareholders, thus avoiding any tax at the RIC
level.
Revenue Estimate -- Survey 1
In connection with the effort to obtain a legislative PFIC
solution, we need your help to develop a revenue estimate for the
proposal. While we realize that responding to this survey will
require more than a nominal effort, this information is essential
to develop an accurate estimate of the proposal's effect on
federal revenue. Please fill out a separate response for each
fund in the complex; do not aggregate your PFIC holdings across
funds. As we need this estimate as soon as possible, we would
appreciate receiving the information on Survey 1 by fax (202)
659-1519 or by mail to the undersigned no later than April 22.
List of Known/Suspected/Possible PFICs -- Survey 2
The Institute also has undertaken to collect and
disseminate information from our members that may be useful in
identifying PFICs. As part of that effort, we periodically need
to update our PFIC list. Attached is a copy of our last survey
results, dated August 24, 1990. Please review the survey
results, make any additions or corrections to the survey, and
return it to the undersigned by fax (202) 659-1519 or by mail no
later than April 19, 1991. We will send out a new list of PFICs
shortly thereafter.
* * * *
Thank you very much for your cooperation in these important
surveys. If you have any questions, please call the undersigned
at (202) 955-3521.
David J. Mangefrida, Jr.
Assistant Counsel - Tax
Survey 2
PFIC List Update
Attached are the August 24, 1991 current PFIC survey
results. Please review the list and make any corrections or
additions directly on the survey or on a separate sheet of paper.