Cross-Border Acquisitions: Structuring Acquisitions, Section 7874 Inversion Rules, Section 338(g) Elections, GRAs

Discussion on sections 367(a) and 367(b) pertain to the tax consequences of certain transactions involving the transfer of property by a U.S. person to a foreign corporation.

Discussion on section 338(g) election which allows the buyer to treat a stock purchase as an asset purchase and allows for a basis step-up for assets purchased.

Discussion on section 7874 transaction in which a domestic corporation or partnership converts into, merges with, or becomes a subsidiary of a foreign corporation through a stock exchange. Section 7874 transactions may result in adverse federal income tax implications. The severity of these tax consequences, amongst other factors, generally hinges on the extent of ownership overlap between the domestic entity before the transaction and the foreign corporation holding its stock or assets afterward.

Listen as our panel of international tax experts covers critical tax considerations for effective cross-border acquisitions.

1. Cross-border acquisitions: introduction
2. Sections 367(a) and 367(b)
   1. Incorporation of a foreign branch
   2. Asset reorganizations
   3. Indirect stock transfers
   4. Transfer of intangible property
   5. Gain recognition agreements
3. Foreign acquisition/ dispositions:
   1. General reorganization provisions for foreign acquisitions
   2. Taxable acquisitions/ dispositions
   3. Section 338(g) Elections
4. Inversion rules: Section 7874

The panel will review these and other critical issues:

• Sections 367(a) and 367(b)
• Section 7874 inversion rules and practical considerations
• Structuring a tax-free acquisition of a foreign company
• How to make a Section 338(g) election and when it is most beneficial
• Utilizing GRAs (gain recognition agreements) to defer tax

Learning Objectives

After completing this course, you will be able to:

• Identify common acquisition structure arrangements in cross border context
• Determine when GRA is considered and understand US exit tax cost on certain outbound transfers
• Determine when the inversion tax on Section 7874 is assessed
• Decide when incorporating a foreign branch can aid a tax-free transfer
• Understand based upon specific facts whether a Section 338(g) election is preferred

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).