Daily Tax Report ®

IRS Shields Some Shareholders from Attribution of Foreign Stock (1)

Nov. 18, 2019, 10:55 PMUpdated: Nov. 19, 2019, 12:43 AM

U.S. shareholders owning stock in foreign corporations got a break in final IRS rules that aim to shield them from unintended tax consequences.

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). A CFC is defined as a foreign corporation that is more than 50% owned by U.S. persons.

The rules limit the scope of a code section that shareholders needed to comply with after changes in the 2017 tax law. By repealing Section 958(b)(4), the law opened up...

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