I.R.C. Section 864(c)(8): Proposed and Final Regulations Explained

Summary

This practice note discusses the proposed regulations under I.R.C. Section 864(c)(8) (Proposed Regulations), which provide guidance on the treatment of gain or loss recognized by foreign persons from the sale or exchange of an interest in a partnership that is engaged in a trade or business in the United States. The practice note also explains how the final regulations, issued on September 21, 2020 (Final Regulations), generally retain the basic approach and structure of the Proposed Regulations with certain clarifications that address the coordination rules involving I.R.C. Section 864(c)(8) and income tax treaties, and the interplay between I.R.C. Section 864(c)(8) and I.R.C. Section 897.