TAX 9869 Lecture Notes - Lecture 45: Foreign Corporation, Installment Sale
Document Summary
Creditor exception rule- a mortgage may fun afoul of 897 to the extent it has an equity feature (participation in appreciation) An outright sale of property, its transfer in satisfaction of a claim, or any other taxable transfer will constitute a disposition. 10. 15 indirect investment- interests held through domestic corporations. If the holding corporation is publicly traded, its shares will not constitute an interest in a real property holding corporation unless the shareholder owns more than 5% of the stock. If the shares in the domestic subsidiary corporation or foreign subsidiary constitute a u. s. real property interest, the entire interest is considered real property interest; if not, none of the interest is so considered. Statutory testing period: the shorter of the period during which the foreign investor held the shares of the five-year period ending on the date of disposition of the shares.
