• Passive Foreign Investment Company Rules: Treatment of Income from Certain Government Bonds for Purposes of the Passive Foreign Investment Company Rules
  • July 5, 2012 | Authors: Theodore D. Holt; Donald L. Korb; Dexter D.J. Samida; Andrew P. Solomon; David C. Spitzer
  • Law Firms: Sullivan & Cromwell LLP - New York Office ; Sullivan & Cromwell LLP - London Office ; Sullivan & Cromwell LLP - New York Office
  • In an important notice responding to current economic conditions, the Internal Revenue Service has acknowledged that banks may be holding larger amounts of government securities than they ordinarily would, and that it does not intend this situation to cause them to be treated as “passive foreign investment companies,” a category that may discourage U.S. persons from investing in their shares.