Final regulations: Funding rule under section 385 (text of regulations)

Final regulations: Funding rule under section 385

The U.S. Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9897) that relate to section 385 and specifically concerning application of the funding rule in Reg. section 1.385-3.

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In early November 2019, Treasury and the IRS issued an advance notice of proposed rulemaking (ANPRM) announcing that future regulations would aim for more streamlined and targeted “distribution regulations.” Read a detailed discussion of the ANPRM in TaxNewsFlash

According to the preamble, today’s final regulations adopt the 2016 proposed regulations “without any substantive change.”

Read the final regulations [PDF 468 KB] (64 pages)

The final regulations include provisions explaining their applicability date rules.  

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