Page 777 - Large Business IRS Training Guides

Cash Reduction Transactions &

Specified Distributions (cont’d)

• A cash reduction transaction that is a distribution by
an SFC to a U.S. shareholder
is treated per se as not undertaken with a principal purpose of
of the SFC
changing the amount of
a section 965 element of a U.S. shareholder, unless it is a
specified distribution.

• A specified distribution,
which is treated as per se undertaken with a principal
purpose of changing the section 965 element
of a U.S. shareholder, is:

• A cash reduction transaction that is a distribution by
an SFC to a U.S.
shareholder
if and to the extent that, at the time of the distribution, there was a
receivable, or
plan or intention for the distributee to transfer cash, accounts
assets to any SFC of the U.S. shareholder, or
cash equivalent

• There is no plan or intention for the distributee to transfer cash, accounts
or cash-equivalent assets to any SFC of the U.S. shareholder
receivable,
if the transfer is pursuant
to a legal obligation entered into before 11/2/17.

• A distribution that is a non pro rata distribution to a foreign person related to
the U.S.
shareholder.

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