Page 487 - Large Business IRS Training Guides

Real World – Pre-TCJA Paradigm (cont’d)
2

US Global Parent 1a. Upfront transfer of valuable IP via

(US Rate 35%) Treas. Reg. 1.482-7 Platform Contribution
Transaction
IRC 367(d) transfer

IRC 721(c) transfer (to partnership)

or even a direct IP sale
CFC
Ltd Risk Dist Co/s Foreign IP HC
Various Countries Bermuda
Tax Rate 30% Tax Rate 0%
1b. On-licensing

Principal Co Ltd Risk Mfg Co
Netherlands 2. Contract Hong Kong
Tax Rate 25% Manufacturer Tax Rate 16.5%
Cost Plus Five

Fee

41