This advisory discusses PLR 201348011, in which the IRS ruled that a U.S. subsidiary would not recognize gain or loss on the distribution of its assets to its foreign parent in complete liquidation—except for gain attributable to Section 936(h)(3) (B) intangibles. The letter ruling offers some positive insight on the IRS’ application of the nonrecognition exception and the general anti-avoidance rule in the Section 367 regulations.
The advisory also discusses final, temporary and proposed IRS regulations (T.D. 9650) relating to determining ownership of passive foreign investment companies (PFICs) and annual reporting requirements.
The full alert is provided on the Alston & Bird website: www.alston.com/advisories/int-tax-1-15-14