KPMG PPT - Tax Executives Institute, Inc.
KPMG PPT - Tax Executives Institute, Inc.
KPMG PPT - Tax Executives Institute, Inc.
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Section 267(f) – Final Regulations Example 3<br />
30% of<br />
T stock<br />
T Stock:<br />
AB=$100<br />
FMV=$10<br />
►<br />
►<br />
B<br />
(Foreign)<br />
S<br />
T<br />
cash<br />
B is foreign. S and T are<br />
members of a consolidated<br />
group.<br />
S sells 30 percent of the T stock<br />
to B for $3 and S’s $27 loss is<br />
deferred under § 267(f).<br />
►<br />
►<br />
►<br />
S<br />
70%<br />
B<br />
(Foreign)<br />
30%<br />
T later liquidates in a taxable transaction<br />
(before any change in the value of the T<br />
stock).<br />
S’s $27 loss continues to be deferred until S<br />
and B (and their successors) are no longer<br />
in a controlled group relationship.<br />
Compare PLR 200812006 (deferred loss is<br />
taken into account at the time of the section<br />
331 liquidation) to PLR 201014002, ILM<br />
201025046, and CCA 200931043 (deferred<br />
loss remains deferred).<br />
T<br />
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firms affiliated with <strong>KPMG</strong> International Cooperative (“<strong>KPMG</strong> International”), a Swiss entity. All rights reserved.<br />
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