Jonathan Cooper and Stephen Legatzke, partners in the firm's Commercial Finance and Corporate groups, co-authored "Opportunity For Increased Foreign Subsidiary Report: New IRS Proposed Tax Regulation Limiting '956 Deemed Dividend' Tax Impact," published in the January/February 2019 edition of The Secured Lender.
The article discusses Section 956 of the US Tax Code, which is often one of the main obstacles to cross-border lending. Section 956 often treats guarantees and collateral provided by foreign subsidiaries to support loans to U.S. borrowers as deemed taxable dividends. The IRS recently announced a proposed regulation that, if finalized, could substantially eliminate such obstacle and enable lenders to significantly expand their cross-border lending activities and improve their collateral positions.
With permission from The Secured Lender, the article is available to be downloaded below.