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On November 26, 2018, the Internal Revenue Service (the “IRS”) and the U.S. Department of the Treasury (the “Treasury”) issued proposed regulations (the “Proposed Regulations”) under section 163(j) of the Internal Revenue Code (the “Code”).[1]  Section 163(j) limits the deductibility of net business interest expense to 30% of “adjusted taxable income” plus “floor plan financing interest expense” for taxable years beginning after December 31, 2017.

The Proposed Regulations generally apply to taxable years ending after the date the Proposed Regulations are published as final regulations. However, taxpayers may elect to apply the Proposed Regulations retroactively to a taxable year beginning after December 31, 2017 so long as the taxpayer and any related parties consistently apply the Proposed Regulations to those taxable years.

This post provides background and a general summary of some of the most important aspects of the Proposed Regulations. For more information, please contact any of the Proskauer tax lawyers listed on this post or your regular Proskauer contact.  Click to read more about the Proposed Regulations.

On December 21st, 2015 the IRS proposed Country-by-Country (“CbC”) reporting rules requiring certain U.S. multinational companies to provide extensive information about business operations (including their revenue, number of employees, taxes paid or withheld, etc.) that may be shared with other taxing authorities under Information Exchange Agreements. The exchange of information is reciprocal; the IRS will expect to receive information regarding the operations of foreign multinational companies conducting business in the United States. This information may be used by the IRS or another country’s competent authority as a basis for making inquiries into potential tax avoidance arrangements. Unsurprisingly, the proposed regulations (and the OECD model on which these rules are based) have garnered criticism among some members of Congress and commentators. The key concerns are confidentiality and the potential for misuse of the information by competent authorities, which are heightened by the unprecedented amount and nature of the information to be disclosed. For a more detailed discussion of the proposed regulations, the confidentiality concerns and the potential concerns about how competent authorities might use such information, please continue reading.  

The Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”) included a number of significant changes to the U.S. federal income tax rules related to real estate investment trusts (“REITs”) and investments by non-U.S. investors in U.S. real estate (commonly referred to as “FIRPTA”). For a detailed overview of

Recently, in Wright v. Commissioner, the United States Court of Appeals for the Sixth Circuit has reopened the question of the application of Section 1256[1] to foreign currency options (and also, possibly, to foreign currency swaps or other, similar foreign currency derivatives). Section 1256 requires a taxpayer