IRS Releases Proposed Regulations Addressing Hybrid Arrangements

On December 20, the IRS released proposed regulations under sections 245A(e) and 267A. Section 245A allows a deduction for certain related party dividends, except in the case of certain hybrid dividends, and section 267A disallows deductions for certain amounts paid in a related-party hybrid transaction or to a related hybrid entity. The proposed regulations under section 267A clarify the application of the provision, and the guidance under section 245A(e) defines hybrid dividends and clarifies the interaction between the provision and foreign tax laws.

Read the Proposed Regulations: REG-104352-18

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