Final Related-Party Debt Regulations Provide Exceptions for Insurance Industry

24 October 2016
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Key takeaways

  • The Treasury and the IRS have issued final and temporary regulations addressing the treatment of certain debt instruments issued between related parties as stock for U.S. federal income tax purposes.
  • The regulations include welcome guidance for the insurance industry, including a general exception for regulated insurance companies from the equity recharacterization rules and an exception that permits surplus notes to satisfy the requirements of the documentation rules.