Source: https://www.ecfr.gov/cgi-bin/text-idx?mc=true&node=se26.15.1_17874_612&rgn=div8
Timestamp: 2020-06-06 12:10:21
Document Index: 577528323

Matched Legal Cases: ['art 1', '§1', '§1', '§1', '§1', '§1']

Title 26 → Chapter I → Subchapter A → Part 1 → §1.7874-12
§1.7874-12 Definitions.
(a) Definitions. Except as otherwise provided, the following definitions apply for purposes of this section and §§1.367(b)-4, 1.956-2, 1.7701(l)-4, and 1.7874-1 through 1.7874-11.
(2) The applicable period means, with respect to an inversion transaction, the period described in section 7874(d)(1). However, see also §1.7874-2(b)(13) in the case of a subsequent acquisition (or a similar acquisition under the principles of §1.7874-2(c)(4)(i)) that is an inversion transaction.
(7) An expanded affiliated group (or EAG) means, with respect to a domestic entity acquisition, an affiliated group that includes the foreign acquiring corporation, determined as of the completion date. A member of the EAG is an entity included in the EAG, and a reference to a member of the EAG includes a predecessor with respect to such member.
(8) An expatriated entity means, with respect to an inversion transaction—
(9) Expatriated foreign subsidiary—(i) General rule. Except as provided in paragraph (a)(9)(ii) of this section, an expatriated foreign subsidiary means a foreign corporation that is a CFC (determined without applying subparagraphs (A), (B), and (C) of section 318(a)(3) so as to consider a United States person as owning stock which is owned by a person who is not a United States person) and in which an expatriated entity is a United States shareholder (determined without applying subparagraphs (A), (B), and (C) of section 318(a)(3) so as to consider a United States person as owning stock which is owned by a person who is not a United States person).
(ii) Exception to the general rule. A foreign corporation is not an expatriated foreign subsidiary if, with respect to the inversion transaction as a result of which the foreign corporation otherwise would be an expatriated foreign subsidiary—
(A) On the completion date, the foreign corporation was both a CFC (determined without applying subparagraphs (A), (B), and (C) of section 318(a)(3) so as to consider a United States person as owning stock which is owned by a person who is not a United States person) and a member of the EAG; and
(B) On or before the completion date, the domestic entity was not a United States shareholder (determined without applying subparagraphs (A), (B), and (C) of section 318(a)(3) so as to consider a United States person as owning stock which is owned by a person who is not a United States person) with respect to the foreign corporation.
(16) A non-EFS foreign related person means, with respect to an inversion transaction, a foreign related person that is not an expatriated foreign subsidiary.
(18) A specified related person means, with respect to an inversion transaction—
(i) A non-EFS foreign related person;
(ii) A domestic partnership in which a non-EFS foreign related person is a partner; and
(iii) A domestic trust of which a non-EFS foreign related person is a beneficiary.
(b) Applicability dates. Except as otherwise provided in this paragraph (b), this section applies to domestic entity acquisitions completed on or after September 22, 2014. The following apply to domestic entity acquisitions completed on or after April 4, 2016: paragraph (a)(8) of this section; in paragraph (a)(6) of this section, the phrase “, including a corporation that succeeds to and takes into account amounts with respect to the domestic entity pursuant to section 381”; and the second sentence of paragraph (a)(10) of this section. For domestic entity acquisitions completed on or after September 22, 2014, and before April 4, 2016, however, taxpayers, may elect to apply the provisions in the immediately prior sentence.
[T.D. 9834, 83 FR 32560, July 12, 2018]