- 10 -
(iv) Intangible property (as defined in
section 936(h)(3)(B)), goodwill or going
concern value, to the extent used or held for
use in the controlled foreign corporation’s
trade or business[.]
In pertinent part, section 1.954-2(a)(3), Income Tax Regs.,
provides: “The use * * * for which property is held is that use *
* * for which it was held for more than one-half of the period
during which the controlled foreign corporation held the property
prior to the disposition.”
2. The Check-the-Box Regulations
a. Development and Issuance of the Regulations
The Commissioner announced, in Notice 95-14, 1995-1 C.B.
297, that the Internal Revenue Service (IRS) and the Department
of the Treasury (Treasury) were considering simplifying the
entity classification regulations to allow taxpayers to treat
both domestic (unincorporated) and foreign business organizations
as partnerships or associations (generally taxable as
corporations) on an elective basis. In Notice 95-14, the
Commissioner justified the proposed radical departure from the
existing classification regulations by observing that, as a
“consequence of the narrowing of the differences under local law
between corporations and partnerships * * * taxpayers can achieve
partnership tax classification for a non-publicly traded
organization that, in all meaningful respects, is virtually
indistinguishable from a corporation.” Id. The Commissioner
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