News & Analysis as of September 20, 2024

Income Taxes › Related Parties

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Income taxes are taxes that are collected on the individual earnings of persons or entities. Depending on the jurisdiction, income taxes are calculated and collected in a variety of ways. Some tax systems collect income taxes based on a progressive scheme, while others may utilize a proportional or regressive framework. less -

IRS issues final (for now) debt/equity regulations

Eversheds Sutherland (US) LLP on 5/15/2020

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

Non-US Persons Holding US Real Estate: Penalties For Failing To File Certain IRS Forms Are Increasing To $25,000

Butler Snow LLP on 3/14/2019

Most non-US persons who are properly advised regarding US real estate ownership will structure their holdings to include some combination of US LLCs, non-US companies, non-US partnerships, non-US trusts and/or non-US...more

Related-Party Provisions Prevent Deduction by S Corp Shareholders - Tax Update Volume 2017, Issue 4

Troutman Pepper on 7/27/2017

Many routine transactions occur between related parties, including the payment or accrual of interest on indebtedness, license fees, salary or benefits to employees and/or shareholders, and trade invoices. The Tax Court...more

Unreasonable Compensation & The Family Business

Farrell Fritz, P.C. on 6/20/2017

“Add-Backs”- In the course of valuing a target business, a potential buyer will want to develop an accurate picture of the target’s earnings and cash flow. In doing so, the buyer will try to normalize those earnings by...more

State Tax Fallout From Federal Proposed Related-Party Debt Regulations

Eversheds Sutherland (US) LLP on 4/26/2016

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

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

Latham & Watkins LLP on 4/21/2016

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

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

Eversheds Sutherland (US) LLP on 4/8/2016

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

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

Skadden, Arps, Slate, Meagher & Flom LLP on 8/18/2015

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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Income Taxes › Related Parties

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