The following comments were submitted in response to the last memo
that raised a question about why anyone in the U.S. would want to
invest in a foreign mutual fund using an IRA. I'm assuming that the
reference to "non-business Taxable Income" is about "Unrelated
Business Taxable Income" which can cause an IRA to be exposed to
income tax.

Vern

Many hedge funds have a master-feeder structure. A US LP for US
taxable investors and a foreign (e.g., Cayman or BVI) corporation that
pays no local taxes for foreign investors pool their money together
for investments. An IRA is better off investing in the foreign
feeder, which is likely to be a PFIC, because leverage on the
investments are dealt with inside the company whereas the same
investments inside an LP can generate Non-Business Taxable Income,
which might necessitate filing a complex return. The same may be true
of private equity funds. Some such funds may also be tradable in
Dublin or Luxembourg.

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