Daily Tax Report: International

IRS Limits Ownership Rules for Controlled Foreign Corporations

Nov. 18, 2019, 2:32 PM

Final IRS tax rules limit application of attribution rules for determining whether U.S. individuals who have ownership in certain foreign companies are related to each other.

The final rules (TD 9883) released Nov. 18 provide methods for determining if a person is a related person to a controlled foreign corporation (CFC)—defined as a foreign corporation that is more than 50% owned by U.S. persons. The rules revise current regulations under Section 954(d)(3).

  • The rules limit the application of Section 318(a)(3) “to avoid inappropriately treating entities, including CFCs, that do not have significant relationship to each other as related...
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