Revision of Previously Taxed Income Regs to Address Basis Issue

The IRS plans to address the timing of basis increases relating to a company’s sale of stock in a foreign affiliate when it revises its proposed regulations on previously taxed earnings and profits, an agency official said Friday.

The government is “aware that there is uncertainty on this issue,” and it will be addressed as part of a larger planned revision of the PTEP proposed regulations in the wake of changes made by the 2025 tax-and-spending law, said James Kostura, senior counsel in the IRS’s Office of Associate Chief Counsel (International).

Kostura made the remarks during a webinar hosted ...