Section 385 Regulations on Related-Party Debt

Avoiding Reclassification of Debt to Equity, Structuring Intercompany Debt Instruments to Withstand IRS Challenges

A live 90-minute premium CLE/CPE video webinar with interactive Q&A


Thursday, June 3, 2021

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, May 14, 2021

or call 1-800-926-7926

This CLE/CPE webinar will provide critical analysis of the IRS regulations under Section 385 to reclassify certain related-party debt as equity for U.S. tax purposes. The panel will discuss the regulations' scope, examine what types of structures and transactions are subject to reclassification as equity, and offer practical guidance on ensuring an existing debt instrument is respected for U.S. income tax purposes.

Description

The Section 385 regulations represent the IRS' approach to related-party debt. The regulations apply to indebtedness owed by domestic corporations to certain related parties that are members of the same expanded group. The regulations also include specific rules relating to (among other things) controlled partnerships and debt among members of the same U.S. consolidated group.

These rules apply to recharacterize certain covered debt instruments from debt to equity for U.S. tax purposes which may result in a number of potentially detrimental tax consequences. In particular, these regulations could result in the disallowance of interest deductions on the recharacterized "debt" instrument and could subject to interest payments or repayments of principal on debt to dividend withholding tax.

Listen as our experienced panel of expert advisers provides a critical analysis of the Section 385 regulations, offering detailed and practical tools to avoid serious tax consequences arising from the debt-to-equity reclassification rules.

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Outline

  1. Overview of Section 385 related-party rules
  2. Entities and structures subject to recharacterization and potential tax consequences
  3. Miscellaneous provisions and issues
    1. Impact of US consolidated groups
    2. Rules relating to controlled partnerships

Benefits

The panel will review these and other critical questions:

  • What is the purpose of the final regulations?
  • What entities are subject to the regulations?
  • What common transactions and instruments are subject to possible recharacterization?
  • What structuring steps must tax counsel take to ensure a related-party debt instrument will be respected as such for U.S. tax purposes?

Faculty

Featherman, Greg
Greg W. Featherman

Partner
Weil Gotshal & Manges

Mr. Featherman advises KPMG partners, employees and clients on corporate tax matters including domestic and...  |  Read More

Gelernter, Josh
Josh Gelernter

International Tax Senior Manager
Withum Smith+Brown

Mr. Gelernter's specialties are international tax services, primarily reorganizations and restructurings.

 |  Read More
Attend on June 3

Early Discount (through 05/14/21)

See NASBA details.

Cannot Attend June 3?

Early Discount (through 05/14/21)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. CPE credit is not available on recordings. Strafford will process CLE credit for one person on each recording. All formats include program handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

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