General rule
Election
In general
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.
When made
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.
Pub. L. 99–514, title XII, § 1235(a)100 Stat. 2571Pub. L. 100–647, title I, § 1012(p)(37)(A)102 Stat. 3522(Added , , ; amended , title VI, § 6127(a), , , 3715.)
Editorial Notes
Amendments
Pub. L. 100–647, § 6127(a)1988—Subsec. (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.”
Pub. L. 100–647, § 6127(a)Subsec. (b). , amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows:
In general“(1) .—A passive foreign investment company may make an election under this subsection for any taxable year. Such an election, once made, shall apply to all subsequent taxable years of such company for which such company is a passive foreign investment company unless revoked with the consent of the Secretary.
When made“(2) .—An election under this subsection may be made for any taxable year at any time before the 15th day of the 3rd month of the following taxable year. To the extent provided in regulations, such an election may be made later than as required by the preceding sentence in cases where the company failed to make a timely election because it reasonably believed it was not a passive foreign investment company.”
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.
Statutory Notes and Related Subsidiaries
Effective Date of 1988 Amendment
section 1012(p)(37)(A) of Pub. L. 100–647Pub. L. 99–514section 1019(a) of Pub. L. 100–647section 1 of this titleAmendment by effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see , set out as a note under .
Pub. L. 100–647, title VI, § 6127(c)102 Stat. 3715
In general .—
Time for making election .—
Effective Date
section 1235(h) of Pub. L. 99–514section 1291 of this titleSection applicable to taxable years of foreign corporations beginning after , see , set out as a note under .
Expiration of Subsection (b) Election Period
Pub. L. 100–647, title I, § 1012(p)(37)(B)102 Stat. 3522