IRS Rules on Classification of Foreign Government Partnerships

It has long been a question whether an entity that is wholly-owned by a non-US government and that would be classified as a partnership for US federal income tax purposes must instead be classified as a corporation for US federal income tax purposes. If the answer were that such a partnership is a corporation, and if not all of the partners were qualified foreign pension funds, none of the income of the partnership would be eligible for exemption from the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”). The IRS recently shed some light on the question in ...