Sales of U.S. Partnership Interests by Foreign Partners: Sections 864(c)(8) and 1446(f)
Lorman Education Services
Taxation Partner Christopher Marotta will offer a presentation through Lorman Education Services on how foreign persons holding interests in entities as partners are subject to U.S. federal income tax upon selling their interests. In 2017, the United States Tax Court issued the Grecian Magnesite decision, which held that foreign partners were largely not subject to U.S. taxes after selling their interests, even if they had been engaged in a U.S. business. Among other legislative responses, the Tax Cuts and Jobs Act (TCJA) amended the Internal Revenue Code to clarify that such dispositions of interest did raise the potential for U.S. tax. The TCJA also enacted a new withholding regime applicable to the transferees of these interests. In this webinar, Mr. Marotta will outline the administrative guidance in this area; withholding obligations, exceptions and limitations; and structuring investments by foreign persons.