§ 1294. Election to extend time for payment of tax on undistributed earnings
(a)
Extension allowed by election
(1)
In general
At the election of the taxpayer, the time for payment of any undistributed PFIC earnings tax liability of the taxpayer for the taxable year shall be extended to the extent and subject to the limitations provided in this section.
(2)
Election not permitted where amounts otherwise includible under section
951
The taxpayer may not make an election under paragraph (1) with respect to the undistributed PFIC earnings tax liability attributable to a qualified electing fund for the taxable year if any amount is includible in the gross income of the taxpayer under section
951 with respect to such fund for such taxable year.
(b)
Definitions
For purposes of this section—
(1)
Undistributed PFIC earnings tax liability
The term “undistributed PFIC earnings tax liability” means, in the case of any taxpayer, the excess of—
(c)
Termination of extension
(1)
Distributions
(A)
In general
If a distribution is not includible in gross income for the taxable year by reason of section
1293
(c), then the extension under subsection (a) for payment of the undistributed PFIC earnings tax liability with respect to the earnings to which such distribution is attributable shall expire on the last date prescribed by law (determined without regard to extensions) for filing the return of tax for such taxable year.
(2)
Transfers, etc.
If—
all extensions under subsection (a) for payment of undistributed PFIC earnings tax liability attributable to such stock (or, in the case of such a cessation, attributable to any stock in such company) which had not expired before the date of such transfer or cessation shall expire on the last date prescribed by law (determined without regard to extensions) for filing the return of tax for the taxable year in which such transfer or cessation occurs. To the extent provided in regulations, the preceding sentence shall not apply in the case of a transfer in a transaction with respect to which gain or loss is not recognized (in whole or in part), and the transferee in such transaction shall succeed to the treatment under this section of the transferor.
(d)
Election
The election under subsection (a) shall be made not later than the time prescribed by law (including extensions) for filing the return of tax imposed by this chapter for the taxable year.
(e)
Authority to require bond
Section
6165 shall apply to any extension under this section as though the Secretary were extending the time for payment of the tax.
(f)
Treatment of loans to shareholder
For purposes of this section and section
1293, any loan by a qualified electing fund (directly or indirectly) to a shareholder of such fund shall be treated as a distribution to such shareholder.
(g)
Cross reference
For provisions providing for interest for the period of the extension under this section, see section
6601.