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Tax Perspectives: Taking a Look at Inbound and Foreign-to-Foreign Transfers

May 28, 2024 (3 min read)

The label "inbound" is given to corporate reorganizations where property or securities are moved from a foreign jurisdiction to a U.S. jurisdiction. The major focus of this practice note, adapted from a chapter in Rhoades & Langer’s U.S. International Taxation and Tax Treaties, is on taxation of U.S. persons holding shares of a controlled foreign corporation (CFC). When a reorganization of a CFC occurs, the U.S. shareholders or the corporation will likely face some gain recognition. The amount recognized turns on the type of transaction in which the corporation engages. Each of the various types of reorganizations is reviewed in this practice note and the amount of gain is discussed.

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