Final sec. 367 regs. on certain transfers of stock and securities to foreign corporations.

• Author: Gordon, Richard
• Position: IRC section 367

The IRS recently issued final regulations on transfers of stock or securities to foreign corporations under Sec. 367, and reporting requirements associated with these transfers under Sec. 6038B. Although the regulations generally cover transfers of foreign stock or securities under Sec. 367(a), they also address the Sec. 367(b) regulations that relate to transactions subject to both Sec. 367(a) and (b).

The final regulations adopt most of the provisions of the proposed regulations and Notice 87-85. Additional provisions or guidance include:

* A five-year period for all gain recognition agreements (GRAs);

* The ability to elect to include income from the triggering of a GRA in the year of the triggering event;

* Removal of restrictions on a taxpayer's ability to use net operating losses and credits to offset the gain recognized on a triggering of a GRA;

* Additional instances that would...