Section 367: Mitigating the Toll Charge on Outbound Property Transfers and Stock Exchanges

Section 367 imposes a toll charge on specific property transfers to foreign corporations outside the U.S. The transfer of property between a U.S. corporation and a domestic subsidiary can be structured so that any gain on appreciated property is deferred; Section 367 was implemented so that appreciated assets transferred and sold abroad would not escape U.S. taxation. This section imposes a toll charge on certain outbound transfers to capture the applicable tax due.

In addition to tangible property, intangible property such as trademarks and patents are subject to this toll charge, as are transfers in exchange for stock. On Oct. 10, 2024, the Treasury and IRS issued final regulations under Section 367(d) pertaining to specific transfers of intangible property from foreign corporations back to the U.S. There are steps taxpayers can take and exceptions available to avoid the impact of Section 367. A GRA, for example, can defer the tax impact of Section 367 for eligible taxpayers.

Listen as our international consulting and compliance expert explains the impact of Section 367 on outbound transfers and offers advice on avoiding its consequences.

1. Section 367: outbound transfers
2. Transfers by a U.S. person to a foreign corporation
3. Transfers of intangible property
4. Outbound transfers to stocks and securities
5. GRAs
6. Transactions subject to 367(b) and 367(a)
7. October 2024 final regulations and other guidance
8. Strategies to avoid Section 367 taxation
9. Required reporting
10. Other considerations

The panel will cover these and other critical issues:

• Tax implications of outbound transfers of tangible property by a U.S. person to a foreign corporation
• Section 367's impact on outbound transfers of stocks and securities
• Utilizing gain recognition agreements to mitigate the impact of Section 367
• Applicable reporting requirements for outbound transfers

Learning Objectives

After completing this course, you will be able to:

• Identify strategies to avoid the impact of Section 367
• Determine reporting requirements for outbound transfers
• Decide how a GRA can mitigate the impact of the Section 367 toll charge
• Ascertain types of property transfers subject to Section 367

• 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).