26 U.S.C. § 6038B — Notice of certain transfers to foreign persons
submitted 42 years ago by Pub. L. 98-369 to r/title-26-INTERNAL-REVENUE-CODE · 432 words · no verdicts yet
This section requires United States persons to report certain transfers of property to foreign corporations or partnerships and certain distributions to non-United States persons. It provides partnership thresholds and penalties.
(a) A United States person* transferring property to a foreign corporation* in an exchange under section 332, 351, 354, 355, 356, or 361, contributing property to a foreign partnership* under section 721 or another regulation-described contribution, or making a section 336 distribution to a non-United States person must give the Secretary* the required information at the prescribed time and in the prescribed way. (b)(1) A contribution to a foreign partnership is covered only if the transferor owns at least a 10-percent direct or indirect interest immediately afterward, or the transferred property's value plus related transfers during the preceding 12 months exceeds $100,000. Value is fair market value at transfer. (2) A contribution treated as made because of section 482 or otherwise is treated as made no earlier than the date the Secretary specifies. (c)(1) Failure to report requires a penalty of 10 percent of fair market value at exchange; for a partnership contribution, gain is recognized as if the property had been sold for that value then. (2) No penalty applies if reasonable cause and no willful neglect are shown. (3) The penalty for an exchange is capped at $100,000 unless the failure was intentional disregard.
Each United States person* who—
transfers property to—
a foreign corporation* in an exchange described in section 332, 351, 354, 355, 356, or 361, or
a foreign partnership* in a contribution described in section 721 or in any other contribution described in regulations prescribed by the Secretary*, or
makes a distribution described in section 336 to a person who is not a United States person,
shall furnish to the Secretary, at such time and in such manner as the Secretary shall by regulations prescribe, such information with respect to such exchange or distribution as the Secretary may require in such regulations.
Subsection (a)(1)(B) shall apply to a transfer by a United States person to a foreign partnership only if—
the United States person holds (immediately after the transfer) directly or indirectly at least a 10-percent interest (as defined in section 6046A(d)) in the partnership, or
the value of the property transferred (when added to the value of the property transferred by such person or any related person to such partnership or a related partnership during the 12-month period ending on the date of the transfer) exceeds $100,000.
For purposes of the preceding sentence, the value of any transferred property is its fair market value at the time of its transfer.
If by reason of an adjustment under section 482 or otherwise, a contribution described in subsection (a)(1) is deemed to have been made, such contribution shall be treated for purposes of this section as having been made not earlier than the date specified by the Secretary.
If any United States person fails to furnish the information described in subsection (a) at the time and in the manner required by regulations, such person shall pay a penalty equal to 10 percent of the fair market value of the property at the time of the exchange (and, in the case of a contribution described in subsection (a)(1)(B), such person shall recognize gain as if the contributed property had been sold for such value at the time of such contribution).
Paragraph (1) shall not apply to any failure if the United States person shows such failure is due to reasonable cause and not to willful neglect.
The penalty under paragraph (1) with respect to any exchange shall not exceed $100,000 unless the failure with respect to such exchange was due to intentional disregard.
Source credit: (Added Pub. L. 98–369, div. A, title I, § 131(d)(1), July 18, 1984, 98 Stat. 664; amended Pub. L. 105–34, title XI, § 1144(a)–(c), Aug. 5, 1997, 111 Stat. 984, 985; Pub. L. 105–206, title VI, § 6011(g), July 22, 1998, 112 Stat. 818; Pub. L. 109–135, title IV, § 409(c), Dec. 21, 2005, 119 Stat. 2636.)
- 1984Enacted · Pub. L. 98-369 · 98 Stat. 664
- 1997Amended · Pub. L. 105-34 · 111 Stat. 984, 985
- 1998Amended · Pub. L. 105-206 · 112 Stat. 818
- 2005Amended · Pub. L. 109-135 · 119 Stat. 2636
A history note hasn’t been published yet. The record shows enactment by Pub. L. 98-369 on 1984-07-18.
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