#### § 1.1295-0 Table of contents.

This section contains a listing of the headings for §§ 1.1295-1 and 1.1295-3.

## § 1.1295-1 Qualified electing funds.

(a) In general. [Reserved]

(b) Application of section 1295 election. [Reserved]

(1) Election personal to shareholder. [Reserved]

(2) Election applicable to specific corporation only.

(i) In general. [Reserved]

(ii) Stock of QEF received in a nonrecognition transfer. [Reserved]

(iii) Exception for options.

(3) Application of general rules to stock held by a pass through entity.

(i) Stock subject to a section 1295 election transferred to a pass through entity.

(ii) Limitation on application of pass through entity's section 1295 election.

(iii) Effect of partnership termination on section 1295 election.

(iv) Characterization of stock held through a pass through entity.

(4) Application of general rules to a taxpayer filing a joint return under section 6013.

(c) Effect of section 1295 election.

(1) In general.

(2) Years to which section 1295 election applies.

(i) In general.

(ii) Effect of PFIC status on election.

(iii) Effect on election of complete termination of a shareholder's interest in the PFIC.

(iv) Effect on section 1295 election of transfer of stock to a domestic pass through entity.

(v) Examples.

(d) Who may make a section 1295 election.

(1) General rule.

(2) Application of general rule to pass through entities.

(i) Partnerships.

(A) Domestic partnership.

(B) Foreign partnership.

(ii) S corporation.

(iii) Trust or estate.

(A) Domestic trust or estate.

(*1*) Nongrantor trust or estate.

(*2*) Grantor trust.

(B) Foreign trust or estate.

(*1*) Nongrantor trust or estate.

(*2*) Grantor trust.

(iv) Indirect ownership of the pass through entity or the PFIC.

(3) Indirect ownership of a PFIC through other PFICs.

(4) Member of consolidated return group as shareholder.

(5) Option holder.

(6) Exempt organization.

(e) Time for making a section 1295 election.

(1) General rule.

(2) Examples.

(f) Manner of making a section 1295 election and the annual election requirements of the shareholder.

(1) Manner of making the election.

(2) Annual election requirements.

(i) In general.

(ii) Retention of documents.

(g) Annual election requirements of the PFIC or intermediary.

(1) PFIC Annual Information Statement.

(2) Alternative documentation.

(3) Annual Intermediary Statement.

(4) Combined statements.

(i) PFIC Annual Information Statement.

(ii) Annual Intermediary Statement.

(h) Transition rules.

(i) Invalidation, termination or revocation of section 1295 election.

(1) Invalidation or termination of election at the discretion of the Commissioner.

(i) In general.

(ii) Deferral of section 1293 inclusion.

(iii) When effective.

(2) Shareholder revocation.

(i) In general.

(ii) Time for and manner of requesting consent to revoke.

(A) Time.

(B) Manner of making request.

(iii) When effective.

(3) Automatic termination.

(4) Effect of invalidation, termination or revocation.

(5) Election after invalidation, termination or revocation.

(i) In general.

(ii) Special rule.

(j) Definitions.

(k) Effective dates.

## § 1.1295-3 Retroactive elections.

(a) In general.

(b) General rule.

(c) Protective Statement.

(1) In general.

(2) Reasonable belief statement.

(3) Who executes and files the Protective Statement.

(4) Waiver of the periods of limitations.

(i) Time for and manner of extending periods of limitations.

(A) In general.

(B) Application of general rule to domestic partnerships.

(*1*) In general

(*2*) Special rules.

(*i*) Addition of partner to non-TEFRA partnership.

(*ii*) Change in status from non-TEFRA partnership to TEFRA partnership.

(C) Application of general rule to domestic nongrantor trusts and domestic estates.

(D) Application of general rule to S corporations.

(E) Effect on waiver of complete termination of a pass through entity or pass through entity's business.

(F) Application of general rule to foreign partnerships, foreign trusts, domestic or foreign grantor trusts, and foreign estates.

(ii) Terms of waiver.

(A) Scope of waiver.

(B) Period of waiver.

(5) Time for and manner of filing a Protective Statement.

(i) In general.

(ii) Special rule for taxable years ended before January 2, 1998

(6) Applicability of the Protective Statement.

(i) In general.

(ii) Invalidity of the Protective Statement.

(7) Retention of Protective Statement and information demonstrating reasonable belief.

(d) Reasonable belief.

(1) In general.

(2) Knowledge of law required.

(e) Special rules for qualified shareholders.

(1) In general.

(2) Qualified shareholder.

(3) Exceptions.

(f) Special consent.

(1) In general.

(2) Reasonable reliance on a qualified tax professional.

(i) In general.

(ii) Shareholder deemed to have not reasonably relied on a qualified tax professional.

(3) Prejudice to the interests of the United States government.

(i) General rule.

(ii) Elimination of prejudice to the interests of the United States government.

(4) Procedural requirements.

(i) Filing instructions.

(ii) Affidavit from shareholder.

(iii) Affidavits from other persons.

(iv) Other information.

(v) Notification of Internal Revenue Service.

(vi) Who requests special consent under this paragraph (f) and who enters into a closing agreement.

(g) Time for and manner of making a retroactive election.

(1) Time for making a retroactive election.

(i) In general.

(ii) Transition rule.

(iii) Ownership not required at time retroactive election is made.

(2) Manner of making a retroactive election.

(3) Who makes the retroactive election.

(4) Other elections.

(i) Section 1291(d)(2) election.

(ii) Section 1294 election.

(h) Effective date.

[T.D. 8750, 63 FR 14, Jan. 2, 1998, as amended by T.D. 8870, 65 FR 5779, Feb. 7, 2000; 65 FR 16319, Mar. 28, 2000; T.D. 9123, 69 FR 24073, May 3, 2004]