PFICS – Israeli Mutual Funds & Teudot Sal
It is not always clear what qualifies as a PFIC which may result in income from PFICs being declared incorrectly. Israeli Mutual Funds, Teudot Sal, ETF’s and Kupot Gemel Lehashkaya are all problematic and fall under the PFIC rules. Sometimes the tax can outweigh the profit on the investment and there may be double taxation. Additionally, if you own these types of investments and don’t sell them by the end of the year, you will have mandatory additional reporting requirements. The safest investments are stocks & bonds.