Description
Understand the factors to take into account when determining debt versus equity.The classification of an instrument as debt or equity is very important for federal tax purposes. The IRS is authorized to issue regulations providing certain factors that must be taken into account in determining whether a certain instrument is debt or equity (or both). The regulations issued by the IRS, as well as various factors developed by the courts, must be examined when making such a determination. This course will assist those responsible for advising clients on issues regarding debt versus equity, including the documentation requirements or best practices.
Date: 2022-07-12 Start Time: End Time:
Learning Objectives
Overview and Background of Section 385
• Debt vs. Equity
• Advantages of Debt
• Advantages of Equity
Determining Whether Something Is Debt or Equity – Case Law and Guidance
• Mixon Factors
• Notice 94-47
• Plantation Patterns and Parent Guarantees
• Treatment of Hybrid Instruments (Preferred Stock, Guaranteed Payments, Contingent Debt, etc.)
2016 Final, Temporary, and Proposed Regulations
• Overview
• Funding Rule
• Distribution Rule
• Documentation Rule
2020 Final Regulations
• What Changed?
• What Didnt?
• Treatment of Temporary Regs
Removal of the Documentation Regulation
• Withdrawal of 1.385-2
• Background, Inconsistency
• Recent Tax Court Decisions (e.g., ITW Case)
CLE (Please check the Detailed Credit Information page for states that have already been approved) ,Additional credit may be available upon request. Contact Lorman at 866-352-9540 for further information.
Frank Comparetto, III-Eversheds Sutherland (US) LLP, Margaret R. Pope – Eversheds Sutherland (US)
