Understand the factors to take into account when determining debt versus equity.
The classification of an instrument as debt or equity is very important for federal tax purposes. The IRS is authorized to issue regulations providing certain factors that must be taken into account in determining whether a certain instrument is debt or equity (or both). The regulations issued by the IRS, as well as various factors developed by the courts, must be examined when making such a determination. This course will assist those responsible for advising clients on issues regarding debt versus equity, including the documentation requirements or best practices.
Learning Objectives
- You will be able to identify whether something is debt or equity and identify the advantages of each.
- You will be able to recognize the 2016 final, temporary and proposed regulations.
- You will be able to recognize the 2020 final regulations.
- You will be able to recognize the removal of the documentation regulation.
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Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Agenda
Overview and Background of Section 385
- Debt vs. Equity
- Advantages of Debt
- Advantages of Equity
Determining Whether Something Is Debt or Equity - Case Law and Guidance
- Mixon Factors
- Notice 94-47
- Plantation Patterns and Parent Guarantees
- Treatment of Hybrid Instruments (Preferred Stock, Guaranteed Payments, Contingent Debt, etc.)
2016 Final, Temporary, and Proposed Regulations
- Overview
- Funding Rule
- Distribution Rule
- Documentation Rule
2020 Final Regulations
- What Changed?
- What Didn't?
- Treatment of Temporary Regs
Removal of the Documentation Regulation
- Withdrawal of 1.385-2
- Background, Inconsistency
- Recent Tax Court Decisions (e.g., ITW Case)
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last reviewed on May 29, 2024.
Call 1-866-352-9540 for further credit information.
- AK CLE 1.5
- Alaska attorneys may receive 1.5 hours of continuing legal education for completing this program. Please contact the Alaska Bar Association or go to www.alaskabar.org for details regarding reciprocity with other states.
- AL CLE 1.5
- This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 1.5 hours credit.
- AR CLE 1.5
- This course has been approved for 1.5 hours of CLE by the Arkansas CLE Board.
- Arizona CLE 1.5
- The Arizona State Bar does not pre-approve or pre-certify MCLE programs. However, records of this program and attendance will be maintained by Lorman Education Services for auditing purposes. This activity may qualify for up to 1.5 hours toward your annual CLE requirement for the State Bar of Arizona.
- CA MCLE 1.5
- Lorman Education Services is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hours of participatory credit.
- CT CLE 1.5
- Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 1.5 CLE credit(s).
- GA CLE 1.5
- This program has been approved by the Georgia Commission on Continuing Lawyer Competency for 1.5 CLE hours.
- MO CLE 2.0
- This course qualifies for self-study CLE credit in Missouri.
- ND CLE 1.75
- North Dakota CLE policy does not allow for pre-approval of any self-study courses. This course may qualify for up to 1.75 hours of CLE credit.
- NH MCLE 1.6
- NH MCLE does not approve or accredit CLE activities for the NH Minimum CLE requirement. Lorman Education Services believes this Ondemand course meets the requirement of NH Supreme Court Rule 53 and may qualify for CLE credit(s). Program Length: 99 Minutes.
- NM CLE 1.6
- This program has been approved by the New Mexico Minimum Continuing Legal Education Board for 1.6 hours of credit.
- NV CLE 1.5
- This program has been approved by the Nevada Board of Continuing Legal Education for 1.5 CLE hours.
- RI CLE 2.0
- This program has been approved by the Rhode Island Mandatory Continuing Legal Education Commission for 2.0 hours of CLE credit.
- VT CLE 1.5
- This self-study program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.5 hour(s) of CLE credit. Please note: Attorneys may only claim 12 credits per compliance period in this format. This course is considered "Non-Moderated Programming without Interactivity".
CPE/NASBA - QAS Self Study 2.8 including Specialized Knowledge 2.8
- Noggin Guru, Inc. dba Lorman Education Services and BankersHub is registered with the National Association of State Boards of Accountancy (NASBA) as a QAS Self Study 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 credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org. For more information regarding administrative policies such as complaint and refund, please contact our offices at 866-352-9539. CPE Credit: Maximum Credit Hours: 2.8 each session (based on a 50 minute credit hour). You must attend at least 50 minutes to obtain credit. Field of Study: Specialized Knowledge for 2.8 hours. Prerequisite: . Level of Knowledge: Intermediate. Teaching Method: Seminar/Lecture. Advance Preparation: None. Delivery Method: QAS Self Study. Please refer to the information in this advertisement for outline, course content and objectives. Upon completion of this course, you will receive a certificate of attendance. Final approval of a course for CPE credit belongs with each state's regulatory board.
To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
Frank Comparetto, III
Eversheds Sutherland (US) LLP
- Associate in the Atlanta office of Eversheds Sutherland
- Advises multinational clients on domestic and international tax planning and transactional matters, including corporate restructurings, taxable and nontaxable mergers and acquisitions, and related financing
- Assists clients with complex tax laws and regulations, defending and negotiating for taxpayers in disputes with the Internal Revenue Service and other tax agencies and boards
- Before joining Eversheds Sutherland, he worked for a Big Four accounting firm, where he focused on domestic and cross-border mergers and acquisitions and advised clients on tax-efficient structuring and tax due diligence
- Experience includes testing Subchapter S qualifications and counseling corporations on Subpart F income planning, joint ventures, and ownership changes under Code section 382
- Served as a law clerk for a natural gas and electric company and as an intern for the Thirteenth Judicial Circuit in Hillsborough County, Florida
- Author of several publications related to his areas of practice
- LL.M. degree in taxation, University of Florida Levin College of Law; J.D. degree, Board Member, Florida Law Review, University of Florida Levin College of Law; B.A. degree in economics, minor in environmental studies, University of Michigan
- Can be contacted at [email protected] or 404-853-8031
Margaret R. Pope
Eversheds Sutherland (US)
- Associate in the Washington office of Eversheds Sutherland
- Represents multinational manufacturing, transportation, and commercial corporate clients in connection with the international tax aspects of their cross-border transactions, including mergers and acquisitions, joint ventures, tax credit planning, complex spin-offs, finance company arrangements, and corporate restructurings
- Offers clients critical analysis concerning Subpart F income planning and advises on currency and hedging transactions in order to align the tax function with clients’ specific business objectives
- Before joining Eversheds Sutherland, she worked in the international tax group of a Big Four accounting firm
- Served as a legal intern for the Tax Division Office of Review of the United States Department of Justice and as a legal congressional intern for Congressman Daniel Lungren of the United States House of Representatives
- Author of several publications related to her areas of practice
- J.D. degree, cum laude, associate editor, Duquesne Law Review, Duquesne University School of Law; B.S. degree, Miami University
- Can be contacted at [email protected] or 202-383-0846
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
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