November 7, 2018

New Proposed Treasury Regulations Under Section 956 May Facilitate Granting Foreign Collateral for Loans

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On October 31, 2018, the Internal Revenue Service (“IRS”) and the US Treasury issued proposed regulations under section 956 of the Internal Revenue Code to resolve certain inconsistencies caused by the Tax Cuts and Jobs Act (the “TCJA”).  These changes make it easier for foreign affiliates of some US borrowers to provide credit support without the adverse tax consequences that previously would have resulted.

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