Definition of Foreign personal holding company (FPHC)
A foreign corporation in which (1) 60 percent or more of the gross income for the taxable year is FPHC income and (2) more than 50 percent of the total combined voting power or the total value of the stock is owned, directly or indirectly, by five or fewer individuals who are U.S. persons (the U.S. group) at any time during the taxable year. The 60 percent of gross income test drops to 50 percent or more after the 60 percent requirement has been met for one tax year, until the foreign corporation does not meet the 50 percent test for three consecutive years or the stock ownership requirement is not met for an entire tax year.
That's the definition of Foreign personal holding company (FPHC) in Black's Law Dictionary 6th Edition. Courtesy of Cekhukum.com.
