#### § 1.881-0 Table of contents.

This section lists the major headings for §§ 1.881-1 through 1.881-4.

## § 1.881-1 Manner of Taxing Foreign Corporations

(a) Classes of foreign corporations.

(b) Manner of taxing.

(1) Foreign corporations not engaged in U.S. business.

(2) Foreign corporations engaged in U.S. business.

(c) Meaning of terms.

(d) Rules applicable to foreign insurance companies.

(1) Corporations qualifying under subchapter L.

(2) Corporations not qualifying under subchapter L.

(e) Other provisions applicable to foreign corporations.

(1) Accumulated earnings tax.

(2) Personal holding company tax.

(3) Foreign personal holding companies.

(4) Controlled foreign corporations.

(i) Subpart F income and increase of earnings invested in U.S. property.

(ii) Certain accumulations of earnings and profits.

(5) Changes in tax rate.

(6) Consolidated returns.

(7) Adjustment of tax of certain foreign corporations.

(f) Effective date.

## § 1.881-2 Taxation of Foreign Corporations Not Engaged in U.S. Business

(a) Imposition of tax.

(b) Fixed or determinable annual or periodical income.

(c) Other income and gains.

(1) Items subject to tax.

(2) Determination of amount of gain.

(d) Credits against tax.

(e) Effective date.

## § 1.881-3 Conduit Financing Arrangements

(a) General rules and definitions.

(1) Purpose and scope.

(2) Definitions.

(i) Financing arrangement.

(A) In general.

(B) Special rule for related parties.

(ii) Financing transaction.

(A) In general.

(B) Limitation on inclusion of stock or similar interests.

(iii) Conduit entity.

(iv) Conduit financing arrangement.

(v) Related.

(3) Disregard of participation of conduit entity.

(i) Authority of district director.

(ii) Effect of disregarding conduit entity.

(A) In general.

(B) Character of payments made by the financed entity.

(C) Effect of income tax treaties.

(D) Effect on withholding tax.

(E) Special rule for a financing entity that is unrelated to both intermediate entity and financed entity.

(iii) Limitation on taxpayer's use of this section.

(4) Standard for treatment as a conduit entity.

(i) In general.

(ii) Multiple intermediate entities.

(A) In general.

(B) Special rule for related persons.

(b) Determination of whether participation of intermediate entity is pursuant to a tax avoidance plan.

(1) In general.

(2) Factors taken into account in determining the presence or absence of a tax avoidance purpose.

(i) Significant reduction in tax.

(ii) Ability to make the advance.

(iii) Time period between financing transactions.

(iv) Financing transactions in the ordinary course of business.

(3) Presumption if significant financing activities performed by a related intermediate entity.

(i) General rule.

(ii) Significant financing activities.

(A) Active rents or royalties.

(B) Active risk management.

(c) Determination of whether an unrelated intermediate entity would not have participated in financing arrangement on substantially same terms.

(1) In general.

(2) Effect of guarantee.

(i) In general.

(ii) Definition of guarantee.

(d) Determination of amount of tax liability.

(1) Amount of payment subject to recharacterization.

(i) In general.

(ii) Determination of principal amount.

(A) In general.

(B) Debt instruments and certain stock.

(C) Partnership and trust interests.

(D) Leases and licenses.

(2) Rate of tax.

(e) Examples.

(f) Effective date.

## § 1.881-4 Recordkeeping Requirements Concerning Conduit Financing Arrangements

(a) Scope.

(b) Recordkeeping requirements.

(1) In general.

(2) Application of sections 6038 and 6038A.

(c) Records to be maintained.

(1) In general.

(2) Additional documents.

(3) Effect of record maintenance requirement.

(d) Effective date.

[T.D. 8611, 60 FR 41005, Aug. 11, 1995]