Loading ...ASX: AZM Azumah News
Another Rock goes to dust. Some one saw value in this company.
Going forward do not expect any 10 to 100 bagers in rocks. They will be bot out before hand. New game in town.
First BGM and now AZM.
Company advises shareholders on take over bid:
https://www.asx.com.au/asxpdf/20190924/pdf/448spr0fxnp8pg.pdf
1. There are pluses and minuses to a Spock subscription. I renewed my subscription within the last week or so. In a recent posting you wondered what was happening with Azumah. dyu626 provided the answer. A Spock subscription would have been the easy way to find out however. Within the last week he had a posting entitled “Azumah.”
2. In the prior posting you asked about why not hold etc. An answer might be because it is likely a PFIC (Passive Foreign Investment Company according to US Tax code). If one files the PFIC form as one is supposed to, one can treat PFICs in different fashions, and how one has treated them may also affect one’s decision on whether to hold. One may want to dispose of a PFIC sooner rather than later because of the tax code. There may be tax reasons for selling a PFIC and buying it back depending on the way one has previously filed. I am still studying this matter rather desperately. Do not rely on me.
3. You allow me an opportunity to correct an error I made previously. I make many errors. Again, do not rely on me. After you recently provided a link to the PFIC reporting form I believe I stated that the IRS estimates that it takes over 20 hours to learn how to complete the form. Actually I read yesterday that the IRS estimates it takes on the average over 40 hours of study to learn how to complete the form. (One is supposed to file 1 form for each PFIC, but I think one has to study only once. I am by the way getting the impression that finding an expert who has studied 40+ hours is maybe more difficult than studying one’s self. However even the experts seem befuddled by the rules.
4. I saw a specialized You Tube yesterday by international tax lawyers for specialists (way over my head) on a tax court ruling on an audit PFIC filings for prior years where there was an assertion that the IRS is mobilizing its people for more attention to international taxes. I do not know these things. Do not rely on me. All I know is that I am spending lots of time on trying to fill out forms. No penalty but lots of interest due potentially is my understanding (or misunderstanding).
5. Frankly I would probably be dumping Azumah as a PFIC just to simplify my life right now except that I am waiting for a better offer. Then I’ll probably dump it. (By my very possibly incorrect understanding of the law even if it is bought by something that is not a PFIC such as, say Barrick, the Barrick shares I might get would count as PFIC shares for me by the rules of “once a PFIC always a PFIC”.) Again, I may be wrong in everything. If someone knows a great source, please let me know.
Wow Karl…I feel your angst wrt to these PFICs
How incredibly ridiculous is this obscure tax code anomaly which requires a full week of study just to understand.
So arcane that even accountants shun it.
Never heard anything so ridiculous.
Good on you to bring this here.
I suspect most will NOT do anywhere near the research you do.
Good luck
PS thanks Bikoo for your ideas on mergers and aquisitions
Agree Karl is doing a great service here.
I am now concern about all the ROCKS I own. They will be bot out having me in loss.
Cross our fingers.
Thanks for your persistent.
First you need to begin with calling Investors relation or CFO of these companies. AND let them tell you how they have “registered ” the company. In the Form 8621 there is a block to be filled out asking for IRS registration number.
I think; “Passive Investments” are registered differently. They are like “Limited Liability” companies.
Thanks for doing this for all here at The Tent.
Thank you for tolerating my comments.
Unfortunately sometimes the procedure of asking a company does not work–
— Sometimes companies do not respond with an answer if contacted.
— Sometimes companies’ documentation goes out of its way not to answer the question. I have looked at recent (possibly not the very most recent) documentation of 3 of the 4 most prominent Canadian precious metals royalty companies. One of them states it is *not* a PFIC. One has stated in recent years it does not know (I just wrote them to ask their most recent opinion). Another stated in its risks sections not too many moons ago that it was not sure whether it was a PFIC but that it might be and that a PFIC status could be a risk for investors (again, I’m awaiting a response to an email I just sent on their current thoughts on their current status and their status for recent prior years).
— One tax adviser I consulted, who has filled out PFIC forms but is not a super-expert, suggested that one could declare a company a PFIC with a note to the IRS saying one was just being conservative and maybe it wasn’t. However in some cases (mainly if one has held a long time and the holding has done really well) one could end up paying massive interest rate charges under some circumstances potentially. Later this person stated in language so obscure I haven’t been able to understand it that he thought the IRS would not like getting a note like this. So I don’t know.
Trump or one of his people once made comments about getting rid of PFIC laws or making them easier, but unfortunately in the current environment the administration is not, as someone commented somewhere on the internet, going to risk being attacked for letting rich people avoid paying taxes by putting their money in foreign countries or something like that.
If we’re lucky some accounting group starts specializing in handling accounts for people like us and the Canadian companies make it a bit easier by having sections explicitly addressing PFIC status and providing relevant data. I have come across a video of an international law group that says it will handle all your PFIC problems for you but I’m not sure it’s for us–even if they’re fine, they may be more for large investors in foreign mutual funds. No idea.
Also note, if my understanding is correct, if you know something is a PFIC, and you get the hang of it, if you file the forms every year correctly you will not get hit too hard though you won’t get long-term capital gains rates. There’s a certain election you will have to make probably annually for each PFIC, according to my flawed understanding, and you can avoid the option where you may get the need to pay the IRS lots of interest on sale. Again, I don’t know — just trying to learn.
Now back to study and forms.
I wish other people would start studying — and asking their tax advisers and their companies. Also the people who recommend these companies. I do not have a good mind for this stuff. Many of you are far better for this. Please tell me.