PASSIVE FOREIGN INVESTMENT COMPANY - PFIC
A foreign-based corporation that has one of the following qualities:
- At least 75% of the corporation's income is considered "passive", which is based on investments rather than standard operating business.
- At least 50% of the company's assets are investments that produce interest, dividends and/or capital gains
PFICs include foreign-based partnerships, mutual funds, and other pooled investment vehicles that have at least one U.S. shareholder. Most investors in PFICs must pay income tax on all distributions and appreciated share values, regardless of whether capital gains tax rates would normally apply.
POPULAR TERMS
Asset Protection Trust
It is a way to protect the asset of an individual from the creditors. The asset protection thrust allow to settle with the debtor using favorable t ...
Cum Dividend
Share price which entails the right to receive the next dividend that is declared but not paid. Opposite of ex dividend.
Partial Redemption
Partial redemption occurs when an investor prefers to withdraw only partial or portion of a security, rather than getting the entire amount. This i ...
Principal Shareholder
It is also known as the majority shareholder, who mainly owns a publicly traded investment. It has the largest percentage of shares of the company ...
Tangible Common Equity Ratio - TCE
Ratio used in gauging the extent of losses a bank can take before wiping out a shareholder equity. It is computed by getting the value of the compa ...
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