The IRS recently issued final regulations that apply to certain cross-border triangular reorganizations. Businesses should consider the potential application of these regulations in any triangular reorganization involving at least one foreign corporation.
The regulations finalize, with modifications, temporary and proposed regulations issued in 2008 in response to certain repatriation transactions also known as "Killer B" transactions. In addition to triangular "B" reorganizations, the regulations apply to other triangular reorganizations, such as section 368(a)(2)(D) and (a)(2)(E) reorganizations, "C" reorganizations, and "G" reorganizations. In addition, this regulation package makes a few changes to the regulations under section 367(a), as discussed below. The regulations generally apply to transactions occurring on or after May 19, 2011.