Regulations Section 1.1411-10(g) Election

In general, you may make the election provided in section 1.1411-10(g) if you own stock of a CFC or QEF. If a section 1.1411-10(g) election is in effect for stock of a CFC or QEF, generally, the amounts you include in income for regular income tax purposes under sections 951, 951A, and 1293 from the stock of the CFC or QEF are included in NII, and distributions from the stock of the CFC or QEF, described in section 959(d) or 1293(c), are excluded from NII.

Your election applies only to the specific stock of the CFC or QEF for which it’s made and stock of the CFC or QEF that you subsequently acquire. If you own a CFC or QEF through certain domestic pass-through entities, such as a domestic partnership, the entity may make the election for the stock of the CFC or QEF and you’ll be considered as having made the election with respect to the stock of the CFC or QEF owned or subsequently acquired by the pass-through entity. The election by the pass-through entity applies only to stock of the CFC or QEF held or subsequently acquired directly or indirectly by the pass-through entity. The pass-through entity’s election doesn’t apply to any stock of the CFC or QEF that you personally hold or subsequently acquire. If the entity doesn’t make the election, you may make the election for the stock of the CFC or QEF owned through the entity.

Timing of election. Your election applies to the tax year for which it’s made and later tax years, and applies to all interests in the CFC or QEF that you later acquire. You can’t revoke the election. In general, the election must be made no later than the first tax year beginning after 2013, in which you include an amount in income for regular income tax purposes under section 951(a), 951A, or 1293(a) for the stock of the CFC or QEF, and are subject to NIIT or would be subject to NIIT if you made the election for the stock of the CFC or QEF. The election may be made for a tax year beginning before 2014. The election can be made on an original or an amended return, provided that the tax year for which the election is made, and all tax years affected by the election, aren’t closed by the period of limitations on assessment under section 6501. For more information, see Regulations section 1.1411-10(g).

Example. If, in 2025, a single individual acquires stock in a QEF, has a QEF inclusion of $5,000, and has MAGI of $150,000, the individual wouldn’t have to make a section 1.1411-10(g) election for 2025 because section 1411 isn’t applicable. If, in 2026, the individual has MAGI in excess of $200,000, and the individual would like to take QEF inclusions into account for purposes of section 1411 in the same manner and in the same tax year as those amounts are taken into account for Code chapter 1 purposes, the individual must make the section 1.1411-10(g) election for 2026 in the time and manner described in Regulations section 1.1411-10(g).

Content requirements of election. If you’re making or made the election in a prior year, you must check the checkbox for “section 1.1411-10(g) election” on the Form 8960 filed with your original or amended return. In addition, you must attach a statement to your return, which includes the following.

• Your name and social security number (individuals) or employer identification number (EIN) (estates and trusts).

• The following information for each CFC or QEF for which an election is made.

1. The name of the CFC or QEF.
2. Either the EIN of the CFC or QEF, or, if the CFC or QEF doesn’t have an EIN, the reference ID number of the CFC or QEF. In addition, list separately each CFC or QEF for which an election is being made for the first time with this return and include on the statement a declaration that you elect under section 1.1411-10(g) to apply the rules in Regulations section 1.1411-10(g).