Distressed Debt Tax Opportunities For Foreign Investors
Partner Seth Entin wrote an article published by Law360 discussing potential federal income tax opportunities and challenges for foreign investors in U.S. distressed debt. If certain conditions are met, foreign investors can earn income from the sale or retirement of debt issued by U.S. companies free of U.S. tax. However, without proper planning, investors risk being subjected to U.S. taxes. Mr. Entin's article summarizes the U.S. tax regimes applicable to foreign investors before explaining both the rules beneficial to investors as well as the issues that may cause them to be subject to U.S. taxes. He also outlines different approaches investors can take to address these issues.