Section 956 Indirect Investment Rule: Final Regulations Expand Types of ‘Funding’

Overview


Lowell Yoder wrote this bylined article on final regulations modifying the Section 956 indirect investment rule for controlled foreign corporations (CFCs). The regulations “appear to require taxpayers to determine whether any transfer of funds made by a CFC to a related foreign corporation that holds an investment in US property might be subject to the indirect investment rule,” Mr. Yoder wrote, and other funding options “would be of doubtful validity” under the rule.