- 7 -
its owner for federal tax purposes, effective immediately prior
to the sale on * * * [June 30, 19973], until 60 days following
the date of this letter.” Respondent, however, added the
following caveat:
no inference should be drawn from this letter that any
gain from the sale of * * * [H&C’s] assets immediately
following its election to be disregarded as an entity
separate from its owner gives rise to gain that is not
foreign personal holding company income as defined in
section 954(c)(1)(B) of the Internal Revenue Code.
On or about October 10, 1999, H&C made an election on Form
8832 to be disregarded as a separate entity. The Form 8832
specifies that the election is to be effective beginning June 30,
1997.
Discussion
I. Introduction
This case presents an issue of first impression and, insofar
as we are aware, the first occasion that any court has had to
opine on the impact of the so-called check-the-box regulations on
the application of a specific provision of the Internal Revenue
Code of 1986 (the Code), in this case, section 954(c)(1)(B)(iii)
(defining, in part, FPHCI).4
3 Based upon petitioner’s representation, that is the
assumed date of the sale of the H&C stock by Dover UK.
4 There has, however, been much commentary concerning the
issue before us today. E.g., Sheppard, “Behind the Eight Ball on
Check-the-Box Abuses”, 101 Tax Notes 437 (Oct. 27, 2003); Yoder &
Everson, “Check-and-Sell Transactions: Proposed Regulations
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011