Tax treatment liquidating distribution pfic

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A, a United States individual, purchases stock in FX, a foreign corporation that is not a PFIC, in 1990 for

A, a United States individual, purchases stock in FX, a foreign corporation that is not a PFIC, in 1990 for $1,000.On January 1, 2005, when the fair market value of the FX stock is $1,100, FX becomes a PFIC.For taxable years 20, Corp X was a nonqualified fund subject to taxation under section 1291.

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A, a United States individual, purchases stock in FX, a foreign corporation that is not a PFIC, in 1990 for $1,000.

On January 1, 2005, when the fair market value of the FX stock is $1,100, FX becomes a PFIC.

For taxable years 20, Corp X was a nonqualified fund subject to taxation under section 1291.

A made a timely section 1296 election with respect to the X stock, effective for taxable year 2007.

The fair market value of the X stock was $200 as of December 31, 2006, and $240 as of December 31, 2007.

Additionally, Corp X made no distribution with respect to its stock for the taxable years at issue.

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,000.On January 1, 2005, when the fair market value of the FX stock is

A, a United States individual, purchases stock in FX, a foreign corporation that is not a PFIC, in 1990 for $1,000.On January 1, 2005, when the fair market value of the FX stock is $1,100, FX becomes a PFIC.For taxable years 20, Corp X was a nonqualified fund subject to taxation under section 1291.

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A, a United States individual, purchases stock in FX, a foreign corporation that is not a PFIC, in 1990 for $1,000.

On January 1, 2005, when the fair market value of the FX stock is $1,100, FX becomes a PFIC.

For taxable years 20, Corp X was a nonqualified fund subject to taxation under section 1291.

A made a timely section 1296 election with respect to the X stock, effective for taxable year 2007.

The fair market value of the X stock was $200 as of December 31, 2006, and $240 as of December 31, 2007.

Additionally, Corp X made no distribution with respect to its stock for the taxable years at issue.

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,100, FX becomes a PFIC.For taxable years 20, Corp X was a nonqualified fund subject to taxation under section 1291.

Any loss recognized on the sale or other disposition of section 1296 stock in excess of any prior unreversed inclusions will be subject to the rules generally applicable to losses provided elsewhere in the Internal Revenue Code and the regulations thereunder.On December 1, 2006, A sells the stock in FX for

Any loss recognized on the sale or other disposition of section 1296 stock in excess of any prior unreversed inclusions will be subject to the rules generally applicable to losses provided elsewhere in the Internal Revenue Code and the regulations thereunder.

On December 1, 2006, A sells the stock in FX for $1,100.

At that time, A's unreversed inclusions (the amount A included in income as mark to market gain) with respect to the stock in FX are $200.

For taxable year 2005, A includes $200 of mark to market gain (the excess of the fair market value of FX stock ($1,200) over A's adjusted basis ($1,000)) in gross income as ordinary income and pursuant to paragraph (d)(1) of this section increases his basis in the FX stock by that amount.

For taxable year 2006, FX does not satisfy either the asset test or the income test of section 1297(a).

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Any loss recognized on the sale or other disposition of section 1296 stock in excess of any prior unreversed inclusions will be subject to the rules generally applicable to losses provided elsewhere in the Internal Revenue Code and the regulations thereunder.On December 1, 2006, A sells the stock in FX for $1,100.At that time, A's unreversed inclusions (the amount A included in income as mark to market gain) with respect to the stock in FX are $200.For taxable year 2005, A includes $200 of mark to market gain (the excess of the fair market value of FX stock ($1,200) over A's adjusted basis ($1,000)) in gross income as ordinary income and pursuant to paragraph (d)(1) of this section increases his basis in the FX stock by that amount.For taxable year 2006, FX does not satisfy either the asset test or the income test of section 1297(a).

,100.At that time, A's unreversed inclusions (the amount A included in income as mark to market gain) with respect to the stock in FX are 0.For taxable year 2005, A includes 0 of mark to market gain (the excess of the fair market value of FX stock (

Any loss recognized on the sale or other disposition of section 1296 stock in excess of any prior unreversed inclusions will be subject to the rules generally applicable to losses provided elsewhere in the Internal Revenue Code and the regulations thereunder.

On December 1, 2006, A sells the stock in FX for $1,100.

At that time, A's unreversed inclusions (the amount A included in income as mark to market gain) with respect to the stock in FX are $200.

For taxable year 2005, A includes $200 of mark to market gain (the excess of the fair market value of FX stock ($1,200) over A's adjusted basis ($1,000)) in gross income as ordinary income and pursuant to paragraph (d)(1) of this section increases his basis in the FX stock by that amount.

For taxable year 2006, FX does not satisfy either the asset test or the income test of section 1297(a).

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Any loss recognized on the sale or other disposition of section 1296 stock in excess of any prior unreversed inclusions will be subject to the rules generally applicable to losses provided elsewhere in the Internal Revenue Code and the regulations thereunder.On December 1, 2006, A sells the stock in FX for $1,100.At that time, A's unreversed inclusions (the amount A included in income as mark to market gain) with respect to the stock in FX are $200.For taxable year 2005, A includes $200 of mark to market gain (the excess of the fair market value of FX stock ($1,200) over A's adjusted basis ($1,000)) in gross income as ordinary income and pursuant to paragraph (d)(1) of this section increases his basis in the FX stock by that amount.For taxable year 2006, FX does not satisfy either the asset test or the income test of section 1297(a).

,200) over A's adjusted basis (

Any loss recognized on the sale or other disposition of section 1296 stock in excess of any prior unreversed inclusions will be subject to the rules generally applicable to losses provided elsewhere in the Internal Revenue Code and the regulations thereunder.

On December 1, 2006, A sells the stock in FX for $1,100.

At that time, A's unreversed inclusions (the amount A included in income as mark to market gain) with respect to the stock in FX are $200.

For taxable year 2005, A includes $200 of mark to market gain (the excess of the fair market value of FX stock ($1,200) over A's adjusted basis ($1,000)) in gross income as ordinary income and pursuant to paragraph (d)(1) of this section increases his basis in the FX stock by that amount.

For taxable year 2006, FX does not satisfy either the asset test or the income test of section 1297(a).

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Any loss recognized on the sale or other disposition of section 1296 stock in excess of any prior unreversed inclusions will be subject to the rules generally applicable to losses provided elsewhere in the Internal Revenue Code and the regulations thereunder.On December 1, 2006, A sells the stock in FX for $1,100.At that time, A's unreversed inclusions (the amount A included in income as mark to market gain) with respect to the stock in FX are $200.For taxable year 2005, A includes $200 of mark to market gain (the excess of the fair market value of FX stock ($1,200) over A's adjusted basis ($1,000)) in gross income as ordinary income and pursuant to paragraph (d)(1) of this section increases his basis in the FX stock by that amount.For taxable year 2006, FX does not satisfy either the asset test or the income test of section 1297(a).

,000)) in gross income as ordinary income and pursuant to paragraph (d)(1) of this section increases his basis in the FX stock by that amount.For taxable year 2006, FX does not satisfy either the asset test or the income test of section 1297(a).

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