PFIC Annual Information Statements
The annual PFIC Statements provide the information necessary for investors who are “U.S. Persons” to make the Qualified Electing Fund (“QEF”) election for U.S. tax reporting purposes with respect to their investments in Cantor special purpose acquisition companies (SPACs) that are organized outside of the U.S. The QEF election allows investors to avoid the adverse tax consequences that would otherwise apply under the default PFIC rules. Under the QEF election, on an annual basis, investors include their pro-rata share of the SPAC’s ordinary earnings and net capital gain for U.S. tax purposes. An investor’s cost basis for SPAC equity will generally increase by the amount of income recognized under the QEF election. The PFIC Statements provide the data required to complete IRS Form 8621, which is used to make and report a QEF election.
Investors should consult directly with their own financial advisor and/or tax professional to discuss the PFIC rules and their potential impact.