IRS Ruling Severely Restricts Mutual Fund Investments in Commodity Index Linked Derivatives

摘要

Failure of a RIC to obtain both its dividends paid deduction in computing its taxable income (to avoid entity level tax) and the special tax-character treatment of certain dividends to its shareholders (such as long-term capital gain, tax-exempt interest and currently U.S. withholding tax exempt distributions of portfolio interest and short-term capital gains to eligible non-U.S. persons) could be disastrous.