For more than four decades, Fenwick & West LLP has helped some of the world’s most recognized companies become, and remain, market leaders. From emerging enterprises to large public corporations, our clients are leaders in the technology, life sciences and cleantech sectors and are fundamentally changing the world through rapid innovation.  MORE >

Fenwick & West was founded in 1972 in the heart of Silicon Valley—before “Silicon Valley” existed—by four visionary lawyers who left a top-tier New York law firm to pursue their shared belief that technology would revolutionize the business world and to pioneer the legal work for those technological innovations. In order to be most effective, they decided they needed to move to a location close to primary research and technology development. These four attorneys opened their first office in downtown Palo Alto, and Fenwick became one of the first technology law firms in the world.  MORE >

From our founding in 1972, Fenwick has been committed to promoting diversity and inclusion both within our firm and throughout the legal profession. For almost four decades, the firm has actively promoted an open and inclusive work environment and committed significant resources towards improving our diversity efforts at every level.  MORE >

FLEX by Fenwick is the only service created by an AmLaw 100 firm that provides flexible and cost-effective solutions for interim in-house legal needs to high-growth companies.  MORE >

At Fenwick, we are proud of our commitment to the community and to our culture of making a difference in the lives of individuals and organizations in the communities where we live and work. We recognize that providing legal services is not only an essential part of our professional responsibility, but also an excellent opportunity for our attorneys to gain valuable practical experience, learn new areas of the law and contribute to the community.  MORE >

Year after year, Fenwick & West is honored for excellence in the legal profession. Many of our attorneys are recognized as leaders in their respective fields, and our Corporate, Tax, Litigation and Intellectual Property Practice Groups consistently receive top national and international rankings, including:

  • Named Technology Group of the Year by Law360
  • Ranked #1 in the Americas for number of technology deals in 2015 by Mergermarket
  • Nearly 20 percent of Fenwick partners are ranked by Chambers
  • Consistently ranked among the top 10 law firms in the U.S. for diversity
  • Recognized as having top mentoring and pro bono programs by Euromoney


We take sustainability very seriously at Fenwick. Like many of our clients, we are adopting policies that reduce consumption and waste, and improve efficiency. By using technologies developed by a number of our cleantech clients, we are at the forefront of implementing sustainable policies and practices that minimize environmental impact. In fact, Fenwick has earned recognition in several areas as one of the top US law firms for implementing sustainable business practices.  MORE >

At Fenwick, we have a passion for excellence and innovation that mirrors our client base. Our firm is making revolutionary changes to the practice of law through substantial investments in proprietary technology tools and processes—allowing us to deliver best-in-class legal services more effectively.   MORE >

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Sales Transactions of Controlled Foreign Corporation Stock: Avoiding Tax Impact For Buyers and Sellers

Sales transactions of CFC stock shares can create unforeseen and costly tax consequences for both purchasers and sellers of CFC shares. Tax counsel structuring purchase transactions must be aware of available tax benefits and possible tax costs in exchanges of CFC stock.

Buyers of CFC shares generally may make an election under IRC Section 338(g) to treat the purchase as a formation of a new foreign corporation that has acquired all assets and assumes all liabilities of the foreign target.

This allows the purchaser to take a step-up of the assets to fair market value, avoiding any U.S. tax costs with the election and boosting the value of foreign tax credits due to the basis differential between the U.S. and the country where the CFC is located. However, Section 901(m) serves to limit those credits, and tax counsel must grasp the impact of the foreign tax credit limitation.

For sellers of CFC shares, Section 1248 can have a dramatic tax impact on the U.S. treatment of sale gains. The Section 1248 rules require a seller to treat gain recognized on the sale or exchange as a dividend under certain conditions.​

However, Section 1248(b) limits the impact of the dividend recharacterization on a covered sale. But, this provision applies only to sales of stock in a CFC located in a country that does not have a bilateral income tax treaty with the United States.

Where CFC shares are owned in a partnership interest, the sale of that partnership share can create still further complexities for the taxpayer in determining treatment of the sale gain. Tax counsel must have a thorough understanding of the tax treatment of CFC sale gains to avoid costly tax consequences.

Listen as our experienced panel provides a thorough and practical guide to structuring tax-efficient purchases and sales of CFC shares.​​