A Regulated Investment Company (RIC) is a type of investment company that is regulated by the Internal Revenue Service (IRS) under the Internal Revenue Code (IRC). RICs are required to follow certain rules and regulations in order to qualify for special tax treatment, including the requirement to distribute at least 90% of their taxable income to shareholders each year.Examples of RICs include mutual funds, exchange-traded funds (ETFs), and closed-end funds. These types of investment companies pool money from multiple investors and use it to purchase a diversified portfolio of securities, such as stocks, bonds, and other financial instruments.In terms of taxes, RICs are generally taxed as pass-through entities, which means that their income and losses are passed through to their shareholders and taxed at the individual shareholder level. This is in contrast to traditional corporations, which are taxed at the corporate level and then again at the individual shareholder level when dividends are paid out. The pass-through tax treatment of RICs allows them to avoid double taxation, which makes them an attractive investment option for many investors.
