“PFIC” – Call Your Accountant Immediately!

For an investor, this is an acronym you don’t want to hear. Unfortunately, Top Ships (TOPS”) announced this week that it expects to be treated as a passive foreign investment company (“PFIC”) for U.S. tax purposes in 2009. This is generally the case if either (1) at least 75% of its gross income for the year consists of certain types of “passive income” or (2) at least 50% of the average value of the corporation’s assets produce or are held for the production of those types of “passive income.” In this instance, TOPS ran afoul of the rules and will

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