Read publication

On 4 April 2016, the US Department of Treasury and the IRS issued Proposed Regulations under Code Section 385 which would dramatically change the manner in which debt instruments are characterized for US federal income tax purposes. The Proposed Regulations add new reporting and documentation requirements and per se rules recharacterizing debt as stock in certain circumstances, and will apply equally to non-inverted foreign-based multinationals and US multinational companies.

This Client Alert provides a detailed description of the Proposed Regulations and the three sets of rules issued with the Proposed Regulations with observations about each rule, and repercussions for Consolidated Groups, Partnerships and Disregarded Entities. Also highlighted are the implications associated with and exceptions to the Proposed Regulations that should be at the forefront of taxpayers' minds.
Explore More Insight