International Tax Advisory: IRS Says Income on Federal Reserve Collateral of Foreign Bank Must Be Allocated Between ECI and Non-ECI
In a recently released Technical Advice Memorandum (TAM) 201325012, the IRS said that interest earned by a foreign bank on notes pledged as collateral for access to the Federal Reserve must be allocated between effectively connected income (ECI) and non-ECI under the “Ten Percent Rule” in Regulations Section 1.864-4(c)(5)(ii)(b)(3).
The advisory is provided in PDF on the Alston & Bird website: www.alston.com/advisories/int-tax-7-15-13
Written by Edward Tanenbaum, Partner, Federal & International Tax | Alston & Bird LLP [...]Read more