News & Analysis as of

U.S. Treasury Related Parties

Holland & Knight LLP

IRS Cracking Down on "Basis-Shifting" in Related-Party Partnership Transactions

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The U.S. Department of the Treasury and IRS recently issued guidance aimed at curtailing purportedly abusive basis-shifting transactions utilized by businesses taxed as partnerships. This guidance represents additional...more

Vinson & Elkins LLP

IRS, Treasury Look to Challenge So-Called Basis-Shifting Transactions, But It Won’t Be Easy

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The Department of the Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) announced the latest chapter in the long-trumpeted enforcement initiative aimed at large partnerships. The guidance, summarized below,...more

Williams Mullen

IRS Releases Finalized Regulations Regarding Taxation of Carried Interest

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The U.S. Department of Treasury and the Internal Revenue Service recently issued final regulations (“the Final Regulations”) regarding certain aspects of so-called carried interest under Section 1061 of the Internal Revenue...more

Eversheds Sutherland (US) LLP

IRS issues final (for now) debt/equity regulations

Final regulations addressing the treatment of certain related-party indebtedness as equity for US federal income tax purposes were released on May 13, 2020. The regulations finalize without material change regulations that...more

Latham & Watkins LLP

Treasury Gives Taxpayers Extra Year to Meet Related-Party Debt Documentation Requirements; Per Se Equity Rule Unchanged

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The one-year postponement assists taxpayers that are developing compliance systems, amidst broader government review of the related-party debt regulations. On July 28, 2017, the US Department of the Treasury (Treasury) and...more

Tucker Arensberg, P.C.

Urgent Captive Insurance Alert: IRS Lists 831(b) Micro-Captives as “Transaction of Interest”

Tucker Arensberg, P.C. on

On November 1, 2016, via Notice 2016-66 (2017-47 IRB) (link to notice), the Treasury Department and IRS declared certain captive insurance transactions under Code section 831(b) as “transactions of interest.” Commonly...more

Latham & Watkins LLP

Treasury Issues Final and Temporary Regulations on Related-Party Debt Instruments

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Seeking to curb “excessive” use of related-party debt, Treasury and IRS retain basic framework, but significantly narrow the scope, of the Proposed Regulations. On October 13, 2016, the US Department of the Treasury...more

BakerHostetler

Final and Temporary Debt-Equity Regulations Under Section 385 Implement Highly Favorable Changes

BakerHostetler on

On Oct. 13, 2016, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued final and temporary regulations under Section 385 governing the treatment of certain instruments as debt or equity...more

BCLP

That Debt Isn’t What You Think It Is: New Proposed Debt/Equity Rules Could Be Biggest Change in Corporate Tax Since 1986

BCLP on

The U.S. Treasury Department issued new proposed tax regulations that would re-characterize certain related party debt as equity, resulting in dividend payments rather than tax deductible interest payments. If finalized in...more

Bilzin Sumberg

Proposed Section 385 Regulations May Dramatically Impact Portfolio Debt Planning

Bilzin Sumberg on

On April 4, 2016, the IRS and Treasury issued proposed regulations under Section 385 (the “Proposed Regulations“). The Proposed Regulations, which were thought to have been a response to post-inversion earnings stripping...more

Baker Donelson

New "Inversion" Proposed Regulations Inspired By The Pfizer/Allergan Deal May Impact Corporate Tax Planning Strategies

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The Treasury Department has recently promulgated proposed regulations dealing with so-called inversion transactions. Inversion transactions are ones in which a U.S. corporation changes its domicile to a nation with a more...more

Foley & Lardner LLP

IRS Rules Could Treat Related Party Debt as Stock

Foley & Lardner LLP on

Multinational groups can strip U.S. earnings away from U.S. taxation by having a domestic corporation issue debt and pay earnings out to foreign affiliates as deductible interest. This strategy could be used after an...more

Eversheds Sutherland (US) LLP

Only the Lonely: “Lonely” Life Insurance Companies Confront New Issues Under Proposed Debt-Equity Regulations

The rules of IRC § 1504 and Treas. Reg. § 1.1502-47 provide the general parameters for determining whether a domestic life insurance company (within the meaning of IRC § 816(a)) may join in filing a consolidated U.S. federal...more

Mintz

Is it Debt or is it Not? Proposed Treasury Regulations Would Significantly Change Debt vs. Equity Analysis

Mintz on

Earlier this month, the IRS and Treasury Department proposed new Treasury regulations (the “Proposed Regulations”) under Section 385 of the Internal Revenue Code. The Proposed Regulations would significantly modify the tax...more

Eversheds Sutherland (US) LLP

State Tax Fallout From Federal Proposed Related-Party Debt Regulations

Recently proposed Treasury regulations under IRC § 385 (the Proposed Regulations) would create sweeping changes to the federal income tax treatment of related-party debt. The Proposed Regulations could also have far-reaching...more

Latham & Watkins LLP

Treasury Issues Stringent Inversion Regulations, Proposes Far-Reaching Related-Party Debt Rules

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New regulations expand prior guidance reducing tax benefits of inversions. Proposed debt-equity rules will impact even routine intercompany transactions. On April 4, 2016, the US Department of the Treasury (Treasury) and...more

Latham & Watkins LLP

Treasury Targets Related-Party Debt with Proposed Regulations to Treat Debt as Equity

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Proposed regulations would establish a sweeping framework to treat debt as equity in an effort to curb the use of “excessive” related-party debt. On April 4, 2016, the US Department of the Treasury (Treasury) and the...more

Eversheds Sutherland (US) LLP

Sweeping Changes Proposed to Tax Treatment of Related-Party Debt May Impact Private Funds

Recently proposed Treasury regulations under IRC § 385 (the Proposed Regulations) would potentially treat related-party debt, in whole or in part, as equity for U.S. tax purposes. The Proposed Regulations generally apply to...more

Morrison & Foerster LLP

Proposed IRS Debt-Equity Regulations: Aimed at PostInversion “Earnings Stripping,” But May Also Impact Ordinary Related-Party Debt

On April 4th, the Internal Revenue Service (“IRS”) issued proposed regulations (the “Proposed Regulations”) under Section 385 which could dramatically change how related-party indebtedness is treated for federal income tax...more

Eversheds Sutherland (US) LLP

Taking Stock in Related-Party Debt: Regulations Propose Sweeping Changes

On April 4, the Treasury and the Internal Revenue Service (IRS) released proposed regulations under IRC § 385 (the Proposed Regulations) that are intended to combat perceived concerns associated with indebtedness between...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Treasury Releases Notice Addressing Transactions Involving Related-Party Partnerships"

On August 6, 2015, the Department of the Treasury issued Notice 2015-54 (the Notice) announcing its intent to issue new regulations addressing transactions involving partnerships formed by related parties. According to the...more

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