The IRS released final rules regarding reporting ownership attribution of foreign corporations under Section 958(b) of TCJA (2017) and finalized proposed regulations published in 2019.

Who cares?

US persons that have an ownership interest, make payments to, or receive payments from certain foreign corporations.

What happened?

In the 2017 change , stock of a foreign corporation, owned by a foreign person could be attributed to a US person under 318(a)(3). This was used to determine if the US person was a US shareholder of the foreign corporation and whether the foreign corporation was considered a controlled foreign corporation (CFC).

In late 2019 the IRS issued proposed rules to repeal that particular change as well as to include relief from certain information reporting requirements and safe harbors related to determining whether a foreign corporation is a CFC and determining taxable income and E&P of a CFC.

There are, of course, more details. If your investments were affected by the 2017 change and you think changes to 958(b) affect your situation, we recommend you talk to your tax advisor.