Interest expense deduction of foreign corporations

Interest expense deduction of foreign corporations

Mike Habib, EA

TD-9465, provides final regulations under section 882(c) of the Internal Revenue Code (Code) concerning the determination of the interest expense deduction of foreign corporations engaged in a trade or business within the United States. These final regulations conform the interest expense rules to recent U.S. Income Tax Treaty agreements and adopt other changes to improve compliance.

REG – 108045-08 and TD-9466 provide guidance regarding the definition of ommission of gross income.

REG-155929-06 contains proposed regulations regarding the requirements to qualify as a Type III supporting organization that is operated in connection with one or more supported organizations. The regulations reflect changes to the law made by the Pension Protection Act of 2006. The regulations will affect Type III supporting organizations and their supported organizations.

Announcement 2009-69 includes changes to Revenue Procedure 2007-65. Specifically, the announcement expands the rights of developers and owners to enter into agreements for the purchase of the wind energy property owned by the partnership to permit a purchase price determined prior to exercise if the parties reasonably believe that the price will not be less than the fair market value of the energy property at the time the right may be exercised, clarifies how section 469 applies to credits generated by wind energy facilities, clarifies that the revenue procedure only provides safe harbor requirements and makes conforming changes to the revenue procedure to reflect these three changes.

Notice 2009-81 explains the circumstances under which the 4-year replacement period under section 1033(e)(2) is extended for livestock sold on account of drought. The Appendix to this notice contains a list of counties that experienced exceptional, extreme, or severe drought conditions during the 12-month period ending August 31, 2009. Taxpayers may use this list to determine if an extension is available.

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