News & Analysis as of

Debt Related Parties

Rivkin Radler LLP

An S Corporation’s Sale of Real Property Following the Death of Its Shareholder

Rivkin Radler LLP on

Don’t Do It- There are certain generally accepted “dos and don’ts” of which almost every investor is certainly aware. For example, do not put all your eggs in one basket; if an investment seems too good to be true, stay...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

A&O Shearman

Proposed Regulations on Related-Party Debt Instruments Would Result in Dramatic Adverse Tax Consequences

A&O Shearman on

On April 4, 2016, the US Department of the Treasury and the Internal Revenue Service proposed regulations under section 385 of the Internal Revenue Code that would recharacterize certain related-party debt instruments, in...more

Foley & Lardner LLP

Attention Taxpayers: New IRS Rules May Deem Debt to Be Stock

Foley & Lardner LLP on

In April, the IRS proposed rules that would treat debt between related corporations as stock for U.S. tax purposes. These rules would apply to all corporations (including regular C corporations, S corporations, foreign...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

Baker Donelson on

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

Latham & Watkins LLP on

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

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

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