PFIC (Passive Foreign Investment Companies)


We can help you clean up your portfolio to reduce any exposure and eliminate any PFICs

You may not realize it, but you could be holding PFIC investments in your portfolio.

The IRS has been focusing on the reporting requirements of  PFICs (Passive Foreign Investment Companies) and making investing in foreign countries more complicated.  Most people have no idea what qualifies as a PFIC, and it is all too easy to declare income from PFICs incorrectly. In order for an investment to be a PFIC it needs to be considered a ‘passive corporation’.  It passes this test if it meets one of the following requirements:


  • 75% or more of the gross income of the investment is passive income.
  • 50% of assets held by the investment produce passive income, or are held for the production of passive income.
  • Most non-U.S. mutual funds fall under this definition. These are so heavily taxed by the U.S. that sometimes the tax can outweigh the profit on the investment. Additionally, even if you only own these investments, and don’t sell any, you may still have to report numerous annual forms listing their values.


PFIC – We can help you:

  • We can analyze your investment portfolio and can identify all PFICs held in your holdings.
  • We can assist in reducing your PFIC exposure using the best methods available.
  • Help minimize the effective tax on newly acquired PFICs.



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