Passive Foreign Investment Companies (PFIC)

A foreign corporation is classified as a PFIC if it satisfies either the income or the asset test

Income Test

75% or more of the foreign corporation’s gross income for a particular taxable year is treated as passive

Asset Test

52% or more of the average value of a foreign corporation’s assets either produce or is held for the production of “passive income”

Passive income generally includes

  • Personal service contract income (generally single owner employee providing expertise)
  • Excess of gains over losses from transactions in any commodities
  • Excess of foreign currency gains over foreign currency losses
  • Excess of gains over losses from the sale/exchange of property
  • Interest income and amounts equivalent to interest
We help our clients with the following tax filings
Type of Filing Form
Expat Taxes 1040, 2555, 1116 and/or State Income Taxes
FBAR 114
FATCA 8938
CFC 5471
PFIC 8621