On Friday December 22, 2017, the President signed into law H.R.1, commonly referred to as the Tax Cuts and Jobs Act (TCJA). This is the most sweeping change to the US federal income tax laws in over three decades, and it will affect every US taxpayer, including participants in the capital markets. The purpose of this blog post is to focus on some of the provisions of the TCJA that will impact interest bearing debt, including leveraged loans and high-yield bond offerings. For background and a more detailed discussion of the TCJA provisions generally, please see, House of Representatives and Senate Conferees Reach Agreement on the Tax Cuts and Jobs Act (H.R. 1).
IRS Updates FATCA FAQs, Addresses January Temporary Regulations
On April 6, 2017, the Internal Revenue Service (the IRS) added three new frequently asked questions to its Foreign Account Tax Compliance Act (“FATCA”) compliance page, which is available only online.[1] These additional FAQs clarify recent temporary regulations (the “Temporary Regulations”) requiring that a beneficial owner withholding certificate contain a foreign taxpayer identification number (“TIN”) and, in the case of an individual beneficial owner, such individual beneficial owner’s date of birth.[2] The FAQs provide temporary relief for calendar year 2017, describing less stringent requirements that are effective through December, 2017.
IRS Issues Final Regulations on REIT and RIC Conversion Transactions
The U.S. Treasury Department and the Internal Revenue Service published on January 18, 2017 final regulations (the “Final Regulations”)[1] reducing from ten years to five years the recognition period for the corporate-level tax imposed on certain property dispositions by a real estate investment trust (“REIT”) or a regulated investment company (“RIC”) under Section 337(d), and otherwise generally adopting the approach set forth in prior temporary and proposed regulations.[2] The need to have a recognition period for corporate-level tax in this circumstance is related to General Utilities repeal[3] as applied for RICs and REITs, and the five-year recognition period established in the Final Regulations was indirectly mandated by the provisions of the PATH Act[4] addressing General Utilities repeal and which we have previously discussed. The Preamble to the Final Regulations states that the intention of the change is to conform the Final Regulations to the PATH Act. Continue reading the discussion for further background and context for the Final Regulations.
Extension of FBAR Filing Deadline for Certain Filers
As noted in our January 5, 2017 client alert, FinCEN issued Notice 2016-1, which extends the filing deadline for the Report of Foreign Bank and Financial Accounts, FinCEN Form 114 (FBAR), for certain individuals with signature or other authority over (but no financial interest in) employer-owned foreign financial accounts