After jumping down the rabbit hole of investing in Japanese companies as a US taxpayer, I understand that if they meet one of two requirements, a company in Japan will be considered a PFIC. (75% of revenue or 50% of assets in passive income etc.)
But how is the determination made?
Is it as simple as “If the US doesn’t announce it as a PFIC then it’s not”?
Or is it one of those “If the IRS finds out after the fact that one of the two requirements was met, and you didn’t declare it as a PFIC, you’re screwed.”
I assume the latter…
So what is the exact way to measure it? January to December? End of fiscal year report? (regardless of what month that is)
What about Japanese companies that just recently went public for the first time? How would we determine their status?
Are there any exceptions for stock options?
Thanks in advanced.
by kinoshitajona
