§1295 — Qualified electing fund
4 cases·1 distinguished·3 cited
Statute Text — 26 U.S.C. §1295
For purposes of this part, any passive foreign investment company shall be treated as a qualified electing fund with respect to the taxpayer if—
an election by the taxpayer under subsection (b) applies to such company for the taxable year, and
such company complies with such requirements as the Secretary may prescribe for purposes of—
determining the ordinary earnings and net capital gain of such company, and
otherwise carrying out the purposes of this subpart.
A taxpayer may make an election under this subsection with respect to any passive foreign investment company for any taxable year of the taxpayer. Such an election, once made with respect to any company, shall apply to all subsequent taxable years of the taxpayer with respect to such company unless revoked by the taxpayer with the consent of the Secretary.
An election under this subsection may be made for any taxable year at any time on or before the due date (determined with regard to extensions) for filing the return of the tax imposed by this chapter for such taxable year. To the extent provided in regulations, such an election may be made later than as required in the preceding sentence where the taxpayer fails to make a timely election because the taxpayer reasonably believed that the company was not a passive foreign investment company.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.1295-0 Table of contents
- Treas. Reg. §Treas. Reg. §1.1295-0(a) In general.
- Treas. Reg. §Treas. Reg. §1.1295-0(b) General rule.
- Treas. Reg. §Treas. Reg. §1.1295-0(c) Protective Statement.
- Treas. Reg. §Treas. Reg. §1.1295-0(d) Reasonable belief.
- Treas. Reg. §Treas. Reg. §1.1295-0(e) Special rules for qualified shareholders.
- Treas. Reg. §Treas. Reg. §1.1295-0(f) Special consent.
- Treas. Reg. §Treas. Reg. §1.1295-0(g) Time for and manner of making a retroactive election.
- Treas. Reg. §Treas. Reg. §1.1295-0(h) Effective date.
- Treas. Reg. §Treas. Reg. §1.1295-0(i) Section 1291(d)(2) election.
- Treas. Reg. §Treas. Reg. §1.1295-0(j) Definitions.
- Treas. Reg. §Treas. Reg. §1.1295-0(k) Effective dates.
- Treas. Reg. §Treas. Reg. §1.1295-0(v) Notification of Internal Revenue Service.
- Treas. Reg. §Treas. Reg. §1.1295-1 Qualified electing funds
- Treas. Reg. §Treas. Reg. §1.1295-1(a) In general.
- Treas. Reg. §Treas. Reg. §1.1295-1(b) Application of section 1295 election.
- Treas. Reg. §Treas. Reg. §1.1295-1(c) Effect of section 1295 election—(1) In general.
- Treas. Reg. §Treas. Reg. §1.1295-1(d) Who may make a section 1295 election—(1) General rule.
- Treas. Reg. §Treas. Reg. §1.1295-1(e) Time for making a section 1295 election—(1) In general.
- Treas. Reg. §Treas. Reg. §1.1295-1(f) Manner of making a section 1295 election and the annual election requirements of the shareholder—(1) Manner of making the election.
- Treas. Reg. §Treas. Reg. §1.1295-1(g) Annual election requirements of the PFIC or intermediary—(1) PFIC Annual Information Statement.
- Treas. Reg. §Treas. Reg. §1.1295-1(h) Transition rules.
- Treas. Reg. §Treas. Reg. §1.1295-1(i) Terminates all section 1294 elections, as provided in § 1.
- Treas. Reg. §Treas. Reg. §1.1295-1(j) Definitions.
- Treas. Reg. §Treas. Reg. §1.1295-1(k) Effective dates.
4 Citing Cases
But unlike prior years’ returns, his 2008 return reported that he held foreign financial accounts. However, on the line used to identify the foreign country or countries where he held any accounts, Mr. Clemons disclosed Germany but not Switzerland. Although his printed Turbo Tax instructions showed that he prepared an FBAR and those instructions directed him to “file it on or before June 30, 2009,” he did not timely file an FBAR. He did not include an election under section 1295 or 1296.
Moreover, for the tax years at issue, petitioners did not report any income or deductions relating to UBS account 0857, make an election under either section 1295 or 1296, file Form 3520, Annual Return To Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, or file Form 3520–A, Annual Information Return of Foreign Trust With a U.S.
But section 1295, and the election under section 1295(b) to treat a foreign corporation as a qualified electing fund within the meaning ofthat section, was enacted in 1986, and regulations requiring annual reporting by U.S. persons making that election were promulgated in 1998. See sec. 1295; Tax Reform Act of 1986, Pub. L. No. 99- 514, sec. 1235(a), 1