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Douglas Stransky
Under Internal Revenue Code section 957(a), a controlled foreign corporation ("CFC") is defined as a foreign corporation in which, on any day of its tax year, greater than 50% of the voting power or value of its stock is owned by U.S. shareholders.
Code section 951(b) defines a U.S. shareholder as any U.S. person who owns 10% or more of the total combined voting power of all classes of stock of the foreign corporation.
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600 weeks ago
Code section 951(b) defines a U.S. shareholder as any U.S. person who owns 10% or more of the total combined voting power of all classes of stock of the foreign corporation.
Hope Shoulders, Esq.
In addition to the advice provided, I would also like to add two points. One, a "U.S person" can be a citizen, resident or a domestic corporation, partnership, trust or estate. And two, in determining whether a U.S. person is a U.S. shareholder, actual, indirect and constructive ownership rules apply.
Indirect ownership, in general, consists of stock beneficially owned by a U.S. person through a foreign corporation, partnership, trust and estate. I.R.C. § 958(a)(2).
In general, constructive ownership treats stock owned by an individual as owned by his or her spouse, children, grandchildren and parents. I.R.C. § 318.
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598 weeks ago
Indirect ownership, in general, consists of stock beneficially owned by a U.S. person through a foreign corporation, partnership, trust and estate. I.R.C. § 958(a)(2).
In general, constructive ownership treats stock owned by an individual as owned by his or her spouse, children, grandchildren and parents. I.R.C. § 318.