The IRS today released an advance version of Notice 2017-55 providing relief from the application of rules for “United States property” when controlled foreign corporations (CFCs) need to move the property—that is, “section 1221(a)(1) property”—because of the damage caused by recent hurricanes.
Section 956(c) defines “United States property” generally to include tangible property located in the United States.
Because of damage caused by Hurricane Irma and Hurricane Maria—including damage in the Commonwealth of Puerto Rico and the U.S. Virgin Islands—CFCs may need to transport property described in section 1221(a)(1) and that is located in affected areas to the United States for safekeeping.
Notice 2017-55 [PDF 11 KB] provides relief for eligible section 1221(a)(1) property that would otherwise constitute “United States property.” The IRS notice explains that:
Similar relief is provided with respect to Hurricane Maria. For purposes of section 956, a CFC will not be treated as holding “United States property” as a result of holding section 1221(a)(1) property located in the United States, if:
The relief provided by Notice 2017-55 applies only to tax year quarters of a CFC ending on or after September 5, 2017, and on or before January 31, 2018.
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