For purposes of this part, any passive foreign investment company shall be treated as a qualified electing fund with respect to the taxpayer if—
(1) an election by the taxpayer under subsection (b) applies to such company for the taxable year, and
(2) such company complies with such requirements as the Secretary may prescribe for purposes of—
(A) determining the ordinary earnings and net capital gain of such company, and
(B) 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.
(Added Pub. L. 99–514, title XII, §1235(a), Oct. 22, 1986, 100 Stat. 2571; amended Pub. L. 100–647, title I, §1012(p)(37)(A), title VI, §6127(a), Nov. 10, 1988, 102 Stat. 3522, 3715.)
1988—Subsec. (a). Pub. L. 100–647, §6127(a), amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: "For purposes of this part, the term 'qualified electing fund' means any passive foreign investment company if—
"(1) an election under subsection (b) applies to such company for the taxable year, and
"(2) such company complies for such taxable year with such requirements as the Secretary may prescribe for purposes of—
"(A) determining the ordinary earnings and net capital gain of such company for the taxable year,
"(B) ascertaining the ownership of its outstanding stock, and
"(C) otherwise carrying out the purposes of this subpart."
Subsec. (b). Pub. L. 100–647, §6127(a), amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows:
"(1)
"(2)
Pub. L. 100–647, §1012(p)(37)(A), inserted sentence at end of par. (2) permitting a later election when a company reasonably believed it was not a passive foreign investment company.
Amendment by section 1012(p)(37)(A) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Pub. L. 100–647, title VI, §6127(c), Nov. 10, 1988, 102 Stat. 3715, provided that:
"(1)
"(2)
Section applicable to taxable years of foreign corporations beginning after Dec. 31, 1986, see section 1235(h) of Pub. L. 99–514, set out as a note under section 1291 of this title.
Pub. L. 100–647, title I, §1012(p)(37)(B), Nov. 10, 1988, 102 Stat. 3522, provided that: "The period during which an election under section 1295(b) of the 1986 Code may be made shall in no event expire before the date 60 days after the date of enactment of this Act [Nov. 10, 1988]."
| § 1.1295-0 | Table of contents |
| § 1.1295-1 | Qualified electing funds |
| § 1.1295-3 | Retroactive elections |
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