The passive foreign investment companies (PFIC) rules were enacted as part of the Tax Reform Act of 1986 to help address perceived abuses in the U.S. taxation of offshore investments as compared to U.S. investments.
As a result, fund tax managers investing in one or more PFICs face additional regulatory, tax reporting and operational challenges when computing taxable income, distribution requirements or other calculations as required by the Internal Revenue Code (IRC) and IRS regulations. Manual tracking of PFIC calculations is tedious, time-consuming and prone to error-risk.
GainsKeeper FundTax® is a powerful automated tax reporting solution already relied upon by more than 4,500 U.S.mutual and hedge funds. This solution includes a sophisticated PFIC module to streamline this process. Clients provide a list of securities identified as PFICs, and the module fully automates the required calculations and tracking associated with the IRC Code Sec 1296 mark-to-market election for PFICs. By automating this process, you can reduce the risks of inaccurate fund distributions and associated IRS penalties.
FundTax PFIC Benefits