U.S. Tax Treatment of Hybrid Entities and Transactions: Sections 267A and 245A(e) Regulations

Navigating the Mismatches of U.S. and Foreign Tax Law, Key Planning Techniques for Tax Professionals

Recording of a 90-minute premium CLE/CPE video webinar with Q&A


Conducted on Thursday, March 25, 2021

Recorded event now available

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Program Materials

This CLE/CPE webinar will discuss U.S. tax law anti-hybrid rules and restrictions that may apply where U.S. and foreign tax law provide different characterizations of transaction or entity, including regulations under Section 267A and Section 245A(e).

Description

The 2017 tax reform provided new anti-hybrid rules to address perceived abuse involving hybrid entities and transactions with related foreign parties. In April 2020, the IRS issued final and proposed regulations under sections 245A(e) and 267A. Tax counsel and advisers must navigate the new regulations' nuances and restrictions in international tax planning.

Section 267A denies a deduction for interest and royalties paid by a U.S. taxpayer to a related foreign party in certain situations, including when there is (1) a double-nontaxation outcome, (2) a double deduction outcome, or (3) a deduction/non-inclusion outcome.

Section 245A(e) addresses hybrid dividends received by a U.S. shareholder from a controlled foreign corporation (CFC). When applied, this provision denies a deduction for dividends received, treats similar amounts received by a CFC as subpart F income, and denies any foreign tax credit.

Listen as our panel discusses key provisions of the new regulations, new anti-hybrid restrictions, and key planning techniques for tax counsel and advisers.

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Outline

  1. Overview of reasons for new rules
  2. Overview of anti-hybrid regulations under Sec. 267A and Sec. 245A
  3. Impact of the new regulations

Benefits

The panel will review these and other key issues:

  • What are the key provisions of recent IRS regulations for hybrid entities and transactions?
  • What are the key tax considerations impacting international tax planning?
  • What are hybrid deduction accounts and how do they impact a taxpayer’s dividends-received deduction under section 245A?
  • What taxpayer relief is provided under the final regulations?

Faculty

Bodoh, Devon
Devon M. Bodoh

Partner
Weil Gotshal & Manges

Mr. Bodoh advises clients on cross-border mergers, acquisitions, inversions, spin-offs, other divisive strategies,...  |  Read More

Diosdi, Anthony
Anthony V. Diosdi

Partner
Diosdi Ching & Liu

Mr. Diosdi is an experienced trial lawyer who regularly defends individuals and corporations in matters involving tax...  |  Read More

Varma, Amanda
Amanda P. Varma

Partner
Steptoe & Johnson

Ms. Varma advises multinational businesses, family offices, and high-net-worth individuals on US federal income tax...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include program handouts.

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