(a) In general.—Pursuant to section 1293(a)(1), every U.S. person that is a direct or indirect shareholder of
a PFIC during a taxable year of the PFIC for which the shareholder has in effect a section 1295
election (within the meaning of § 1.1295-1(a)) includes in gross income the shareholder’s pro rata
share of the ordinary earnings and net capital gain of such fund for that taxable year. Such
amounts are included in income in the taxable year of the shareholder in which or with which the
taxable year of the PFIC ends. Section 1293 applies to a shareholder of a pedigreed QEF (as
defined in § 1.1291-1(b)(2)(ii)) only for those taxable years during which the corporation qualifies
as a PFIC under section 1296(a). Section 1293 applies to a shareholder of an unpedigreed QEF (as
defined in § 1.1291-1(b)(2)(iii)) for those taxable years during which the corporation is a PFIC (as
defined in § 1.1291-1(b)(1)).
(b) Other rules.—[Reserved][Prop. Reg. § 1.1293-1.]
[Proposed 4-1-92.]