Code Section 852(g)
| Code Section | Effective Date | Name of Act | Name of Provision |
|---|---|---|---|
| 852(g) | 12/22/2010 | Regulated Investment Company Modernization Act of 2010 | Pass-thru of Exempt-interest Dividends and Foreign Tax Credits in Fund of Funds Structures |
Pass-thru of Exempt-interest Dividends and Foreign Tax Credits in Fund of Funds Structures
Explanation of Provision
Under the provision, in the case of a qualified fund of funds, the RIC may (1) pay exempt-interest dividends without regard to the requirement that at least 50 percent of the value of its total assets consist of tax-exempt State and local bonds and (2) elect to allow its shareholders the foreign tax credit without regard to the requirement that more than 50 percent of the value of its total assets consist of stock or securities in foreign corporations.
For this purpose, a qualified fund of funds means a RIC at least 50 percent of the value of the total assets of which (at the close of each quarter of the taxable year) is represented by interests in other RICs.
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