[30861]
September 5, 2017 TO: Management Company Tax SubcommitteeTax Committee RE: ICI RIC-Specific Legislative Proposals
Attached are several legislative proposals that the Institute has submitted to Congressional staff. These proposals, which are specific to regulated investment companies (“RICs”), would:
- Permit net operating losses (NOLs) for RICs;
- Permit special allocations of earnings and profits to capital gain distributions;
- Clarify the treatment of derivatives under specified mark-to-market provisions;
- Provide an election allowing non-calendar year RICs to avoid return of capital distributions;
- Clarify late-year ordinary loss deferral rules for October and November year-end funds;
- Treat commodities as good income;
- Rationalize the application of section 382 to RICs held by 401(k) plans;
- Clarify the application of the excise tax rules to certain deemed dividends from corporations;
- Clarify that Subpart F and Qualified Electing Fund (QEF) inclusions constitute good income;
- Revise the deficiency dividend rules to account for tax-exempt shareholders; and
- Clarify the definition of publicly offered RICs.
We also have been discussing a fiscal year-to-date safe harbor for calculating excise tax liability (attached). We are considering whether a legislative solution is necessary, or whether a regulatory solution is possible.
We will discuss these proposals on the next Tax Committee conference call (scheduled for Tuesday, September 12, at 11:00 a.m. ET). Please also feel free to contact me (202-371-5432 or kgibian@ici.org) if you have any questions or would like to discuss any of the proposals.
Karen Lau Gibian
Associate General Counsel