Source: http://intltax.typepad.com/intltax_blog/2018/04/new-video-attribution-rules-for-965-specified-foreign-corporations.html
Timestamp: 2018-04-23 23:07:33
Document Index: 542902894

Matched Legal Cases: ['§965', '§951', '§958', '§958', '§958', '§958', '§958', '§958', '§318', '§318']

New Video – Attribution Rules for 965 Specified Foreign Corporations - International Tax Blog
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New Video – Attribution Rules for 965 Specified Foreign Corporations
Code §965(e)(1) provides that the term “specified foreign corporation” means (A) any CFC and (B) any foreign corporation with respect to which one or more domestic corporations is a U.S. shareholder.
For taxable years of foreign corporations beginning before January 1, 2018, under Code §951(b), a U.S. shareholder is a U.S. person that owns within the meaning of Code §958(a), or is considered as owning by applying the rules of ownership of Code §958(b), 10% or more of the total combined voting power of all classes of stock entitled to vote of the stock of a foreign corporation.
Code §958 provides rules for determining direct, indirect, and constructive stock ownership. Under Code §958(a)(1), stock is considered owned by a person if it is owned directly or is owned indirectly through certain foreign entities under Code §958(a)(2). Under Code §958(b), Code §318 applies, with certain modifications, to the extent that the effect is to treat any U.S. person as a U.S. shareholder.
Code §318 provides certain attribution rules. Under these attribution rules, a person that does not directly or indirectly own stock in a foreign corporation can nonetheless be treated as a U.S. shareholder of that foreign corporation. Notice 2018-26, Section 3.01 includes an example that shows how a foreign corporation that is not a CFC can be considered owned by a domestic corporation under the constructive attribution rules, causing the non-CFC to be treated as a specified foreign corporation.
We have created a video that goes through the example in the Notice, and also goes through a simplified example of where a non-CFC can be considered a specified foreign corporation in a counterintuitive way.
Posted on April 06, 2018 in 318 Attribution, 965 Transition Tax | Permalink