BBD's Investment Company Notebook

A Closer Look at RIC Diversification Testing

In a previous post, we took a look at the technical requirements of the asset diversification tests that a fund must pass in order to qualify as a regulated investment company (“RIC”) for federal income tax purposes.... More

Fund Restructuring- Part I

There has been much movement in the mutual fund industry recently in terms of fund restructuring. As the economic crisis started in 2008, a sort of cleansing process in the market took place. A number of those funds that... More

ETFs Need Their Own Accounting Rules- Part IV- Total Return

All investment companies (“Funds”) registered under The Investment Company Act of 1940 are required to calculate and present a Total Return in their financial statements.  Total Return represents the rate that an investor... More

FYE 2012- A Golden Window of Opportunity to Harvest… Gains?

As many portfolio managers are familiar with the concept of harvesting losses in an effort to be as tax efficient as possible, the idea of harvesting gains probably sounds strange.  However, fiscal year 2012 may be a year... More

The PCAOB’s Proposal For Transparency and Accountability

Due to the recent events in the national and global business world, there has been an outcry for transparency and accountability from big business.  In this spirit, the Public Company Accounting Oversight Board (PCAOB) has... More

Financial Statement Presentation of Regulated Investment Company’s Investment in Other Investment Companies

There are different scenarios in which an investment company invests in another investment company (registered or unregistered)— master-feeder fund structures; funds of funds; investment companies that happen to be invested... More

Internal Revenue Code Diversification Requirements

In order to avail itself of the favorable tax treatment afforded to a “regulated investment company” or “RIC,” a fund must meet the following requirements: The 50% Test At the close of each quarter of the taxable... More

Tax Consequences Associated With Option Strategies- Part IV

In this, our fourth and final post concerning the tax consequences associated with covered call writing, we will present examples that are intended to illustrate and build upon the principles discussed in the previous posts... More

Tax Consequences Associated With Option Strategies- Part III

As we continue to explore the tax consequences associated with covered call writing, we turn to certain collateral issues related to the straddle rules. Namely, the effect on the “holding period” of the underlying stock... More

Tax Consequences Associated With Option Strategies- Part II

In our last post, we examined the basics of the straddle rules, including the definition of a straddle and loss deferral rules associated with a straddle. In this post, we will look at an important exception to the straddle... More