Unpacking the New §901(m) Proposed Regulations

Temporary and proposed regulations under §901(m) were issued as part of the deluge of guidance at the end of the Obama administration. With the exception of temporary regulations addressing certain limited topics, the comprehensive new regulations under §901(m) were issued only in proposed form and with a prospective effective date.

Yet ‘‘covered asset acquisitions’’ subject to §901(m) remain a regular occurrence in international mergers and acquisitions (‘‘M&A’’), and the proposed regulations may provide clarifications on certain issues in applying §901(m). In addition, the drafters of the proposed regulations, perhaps foreseeing that the proposed regulations might languish before adoption, include reliance language to allow taxpayers to rely on the proposed regulations immediately, subject to applying the proposed regulations in their entirety to all covered asset acquisitions occurring after January 1, 2011. For taxpayers that would like to begin to rely on positive provisions in the proposed regulations, they must ‘‘take the bitter with the sweet.’’ Therefore, in deciding whether to apply any part of the proposed regulations, a taxpayer needs to have a complete grasp of the relevant provisions.

For a review and detailed analysis of the proposed regulations, in all of their good, bad, and indifferent features, from the perspective of a taxpayer contemplating early adoption of the proposed regulations, please download the full article.

Reproduced with permission from Tax Management International Journal, 46 TM International Journal 303, 6/9/17. CopyrightⒸ 2017 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com


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