Thanks for the heads up.
I have already invested in a stock from Holland STM
and sold for a profit.
Not thinking about the tax ramifications.
I will have to check with my accountant
Some info on it I garnered --
75% or more of its gross income for the taxable year is passive income or
the average percentage of assets it holds during the taxable year which produce passive income or which are held for the production of passive
income is at least 50 percent.
Special US federal income tax and reporting rules apply to US investors that are considered to hold shares in a foreign company that produces
sufficient passive income or holds sufficient passive assets to meet the definition of a PFIC, even if the foreign company met the definition
for only one year during the investor's holding period. The rules applicable to PFIC shareholders are detailed and complicated. For example,
three different sets of rules, or regimes, apply to US shareholders in a PFIC: a basic (or default) regime that subjects "excess distributions"
from a PFIC to additional US income taxes on the income considered to be deferred or one of two alternative elective regimes
(the "Qualified Electing Fund" and "mark-to-market" regimes) for shareholders in PFICs that qualify for those elective regimes. Stated simply,
the goal of the PFIC rules is to deny the potential deferral of US tax that might otherwise be available to a US person that invests in a foreign
investment fund that accumulates income. The PFIC rules effectively force US shareholders in a PFIC, no matter how small their interests may be,
to recognize income earned by the PFIC currently (whether that income is distributed to the shareholder or not) or else pay US tax at the highest
possible rate, plus interest, on the income once it is distributed to the PFIC shareholder.
