Tax Reform Act of 2014 - Proposed Changes to RIC Related Provisions

March 12, 2014
Client Alert

Recently proposed legislation would generally (i) require sale treatment when a C corporation elects to become a regulated investment company or transfers assets to a RIC, (ii) treat certain RIC shares as United States real property interests subject to tax by non-U.S. persons on disposition, and (iii) provide that RIC dividends received through foreign corporations would not be eligible for a dividends received deduction.

On February 26, 2014, Representative David Camp, chair of the House Ways and Means Committee, released draft legislation referred to as the Tax Reform Act of 2014. The following is a summary of the proposed changes to the RIC provisions of the Internal Revenue Code included in the draft legislation. We have also prepared summaries of other provisions relevant to other topical areas - please check our website for those. Although the Tax Reform Act of 2014 has not yet been formally introduced as a bill, and its prospects for passage are uncertain at this point, given the significant nature of the proposed reforms, we will monitor their progress and provide updates as warranted.

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