Overview
Amanda Varma authored an article titled "IRS Advice Memorandum Addresses Mid-Year PTEP Distributions" for Bloomberg Tax's Tax Management International Journal. The article discusses a recent IRS legal advice memorandum concluding that current-year controlled foreign corporation (CFC) income inclusions are taken into account when determining basis for purposes of determining whether a mid-year distribution of previously taxed earnings and profits (PTEP) generates gain. The operation of the PTEP and related basis adjustment rules to mid-year distributions has been a longstanding issue of interest to many U.S. multinationals. The memorandum reaches the same conclusion as a recent private letter ruling, providing further (albeit limited) explanation of the IRS's legal analysis and likely previewing the IRS’s approach in proposed regulations expected to be released later in 2023.
The full article can be read in Bloomberg Tax Management International Journal.
