The Secretary may require a foreign firm's tax year to close on a sale
What the document says“The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this subsection, including regulations or other guidance allowing taxpayers to elect, or requiring taxpayers, to close the taxable year of a controlled foreign corporation upon a direct or indirect disposition of stock of such corporation.”
The section requires the Secretary to prescribe regulations or guidance to carry out the subsection, including rules letting taxpayers elect, or requiring them, to close the taxable year of a controlled foreign corporation on a direct or indirect disposition of its stock.
What the document actually says“The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this subsection, including regulations or other guidance allowing taxpayers to elect, or requiring taxpayers, to close the taxable year of a controlled foreign corporation upon a direct or indirect disposition of stock of such corporation.”
The Secretary must write rules for this part. They may let a firm close its tax year when shares are sold. They may also require it.
A sale can be direct or through a chain. Closing the year fixes the count at that point. The choice may rest with the taxpayer.
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