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Uproar Over Proposed §385 Regulations: Will Treasury Delay Adoption?

Volume 3 No 8    /    Read Article

By Philip R. Hirschfeld and Stanley C. Ruchelman

Earlier this year, the U.S. Treasury Department issued comprehensive and detailed proposed regulations under Code §385 that address whether a debt instrument will be treated as true debt for U.S. income tax purposes or re-characterized, in whole or in part, as equity. Not surprisingly, significant pushback has been encountered from members of Congress, professional bodies, and affected taxpayers. It seems that the one-size-fits-all approach contains many defects. Philip R. Hirschfeld and Stanley C. Ruchelman explain.    See more →