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Intercompany Debt: A Handshake Isn’t Enough

September 03, 2024 (3 min read)

For U.S. tax purposes, a company must comply with certain tax and transfer pricing considerations when structuring intercompany debt transactions. Considerations include application of the arm's length standards of Treas. Reg. § 1.482-2(a), documentation requirements of regulations under I.R.C. § 385, and the characterization of the instrument as either debt or equity under case law, rulings, and I.R.C. § 385.  

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