Insight

COVID-19 tax impact to RICs

Five key steps to enhance your tax position

Deanna J. Flores

Deanna J. Flores

Principal, Global Tax Leader – Public Investment Management, KPMG US

+1 858-342-7661

Deirdre Fortune

Deirdre Fortune

Partner, Deputy Tax Leader – Public Investment Management, KPMG US

+1 407-563-2230

As COVID-19 continues to unfold, its wide-ranging impact on the financial and capital markets, the liquidity challenges it’s created, and the overall atmosphere of economic uncertainty becomes more evident. In particular, its potential tax impact on regulated investment companies (RICs) and their shareholders is beginning to come into clearer focus.

This article is intended to provide a working checklist of the top five key tax issues that have emerged to date for RICs of all types – mutual funds, exchange traded funds (ETFs), closed end funds, fund of funds, and business development companies (BDCs).

Download the article to learn more about the five key steps to help bolster tax positions for RICs and their shareholders:

  • RICs and their shareholders should stay informed during this fast moving regulatory and legislative environment.
  • Actively monitor asset and income qualification requirements.
  • Consider deploying cash conservation and alternative distribution strategies to increase cash reserves/prepare for investment opportunities.
  • Assess the impact of market conditions on portfolio holdings and transactions.
  • Manage liquidity issues for money market funds.