Tax News

CCH (cch.taxgroup.com) reports:

  Under proposed regulations issued by the IRS, for purposes of determining whether a conduit financing arrangement exists, the term "person" includes a business entity that is disregarded as an entity separate from its single-member owner. In general, the IRS is allowed to disregard the participation of one or more intermediate entities in a financing arrangement where an entity is acting as a conduit entity and recharacterize the financing arrangement as a transaction directly between the remaining parties to the financing arrangement for purposes of imposing tax under Code Secs. 871, 881, 1441 and 1442.

  Questions have arisen regarding the proper treatment of a disregarded entity, an entity that is not classified as a corporation, that has a single owner and that has elected to be disregarded as an entity separate from its owner, The proposed regulations would make it clear that transactions into which a disregarded entity enters will be taken into account for purposes of determining whether a financing arrangement exists.

Proposed Regulations, NPRM REG-113462-08, 2009FED ¶49,408

Other References:

 
Code Sec. 881

  CCH Reference - 2008FED ¶27,485C

  Tax Research Consultant

  CCH Reference - TRC SALES: 3,166
CCH Reference - TRC EXPAT: 15,112
CCH Reference -
TRC INTL: 3,120