US IRS to modify tax regs on triangular reorganizations involving foreign corporations; inbound nonrecognition transactions

The US IRS today announced that it will modify tax regulations under section 367 to address triangular reorganizations involving foreign corporations where a subsidiary acquires its parent’s stock for property and uses that stock to acquire a target corporation.

The announcement, Notice 2016-73, also states that IRS will modify the section 367 regulations with respect to the “all earnings and profits” amount that must be included in income as a result of certain inbound asset acquisitions that repatriate “excess asset basis.”

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