§ 1.1473-1T - Section 1473 definitions (temporary).

§ 1.1473-1T Section 1473 definitions (temporary).

(a) [Reserved] For further guidance, see § 1.1473-1(a).

(1) [Reserved] For further guidance, see § 1.1473-1(a)(1) through (a)(1)(ii).

(2) [Reserved] For further guidance, see § 1.1473-1(a)(2).

(i) through (v) [Reserved] For further guidance, see § 1.1473-1(a)(2)(i) through (v).

(vi) Special rule for sales of interest bearing debt obligations. Income that is otherwise described as U.S. source FDAP income in paragraphs (a)(2)(i) through (v) of this section does not include an amount of interest accrued on the date of a sale or exchange of an interest bearing debt obligation if the sale occurs between two interest payment dates and is not part of a plan described in § 1.1441-3(b)(2)(ii).

(vii) [Reserved] For further guidance, see § 1.1473-1(a)(2)(vii) through (a)(2)(vii)(B).

(3) [Reserved] For further guidance, see § 1.1473-1(a)(3).

(i) through (ii) [Reserved] For further guidance, see § 1.1473-1(a)(3)(i) through (a)(3)(ii)(C).

(iii) [Reserved] For further guidance, see § 1.1473-1(a)(3)(iii).

(A) [Reserved] For further guidance, see § 1.1473-1(a)(3)(iii)(A).

(B) [Reserved] For further guidance, see § 1.1473-1(a)(3)(iii)(B).

(1) through (3) [Reserved] For further guidance, see § 1.1473-1(a)(3)(iii)(B)(1) through (3).

(4) In the case of a sale of an obligation described in paragraph (a)(2)(vi), gross proceeds includes any interest accrued between interest payment dates other than an amount described in paragraph (a)(2)(vi) of this section that is treated as U.S. source FDAP income; and

(5) [Reserved] For further guidance, see § 1.1473-1(a)(3)(iii)(B)(4).

(4) [Reserved] For further guidance, see § 1.1473-1(a)(4).

(i) through (v) [Reserved] For further guidance, see § 1.1473-1(a)(4)(i) through (v).

(vi) Offshore payments of U.S. source FDAP income prior to 2017 (transitional). A payment with respect to an offshore obligation (as defined in § 1.1471-1(b)(88)) made prior to January 1, 2017, if such payment is U.S. source FDAP income and made by a person that is not acting as an intermediary or as a WP or WT with respect to the payment. Additionally, a payment with respect to an account, obligation, contract, or other instrument that is issued or maintained by an entity other than a financial institution and that would be treated as an offshore obligation under § 1.6049-5(c)(1) (applied by substituting the term entity for the term financial institution (as defined in § 1.1471-5(e)) in each place that it appears), made prior to January 1, 2017, if such payment is U.S. source FDAP and made by a person that is not acting as an intermediary or as a WP or WT with respect to the payment is not a withholdable payment under paragraph (a)(1) of this section. The exception for offshore payments of U.S. source FDAP income provided in the preceding sentences shall not apply, however, in the case of a flow-through entity that has a residual withholding requirement with respect to its partners, owners, or beneficiaries under § 1.1471-2(a)(2)(ii), or in the case of payments made with respect to debt or equity issued by a U.S. person (excluding interest payments made by a foreign branch of a U.S. financial institution with respect to depository accounts it maintains). For purposes of this paragraph (a)(4)(vi), an intermediary includes a person that acts as a qualified securities lender as defined for purposes of chapter 3 and does not include a person acting as an insurance broker with respect to premiums.

(vii) Collateral arrangements prior to 2017 (transitional). A payment made prior to January 1, 2017, by a secured party, or to a secured party other than a nonparticipating FFI, with respect to collateral securing one or more transactions under a collateral arrangement, provided that only a commercially reasonable amount of collateral is held by the secured party (or by a third party for the benefit of the secured party) as part of the collateral arrangement. For purposes of this paragraph (a)(4)(vii), the term transaction generally includes a debt instrument, a derivative financial instrument (including a notional principal contract, future, forward, and option), and any securities lending transaction, sale-repurchase transaction, margin loan, or substantially similar transaction that is subject to a collateral arrangement. Solely for purposes of this paragraph (a)(4)(vii), a secured party may provide documentation to the withholding agent indicating that it is the beneficial owner of a payment described in this paragraph (a)(4)(vii), and a withholding agent may rely on such certification for purposes of its requirements under § 1.1471-3(d) for determining whether withholding under chapter 4 applies.

(5) [Reserved] For further guidance, see § 1.1473-1(a)(5).

(i) In general. This paragraph (a)(5) provides special rules for a flow-through entity, complex trust, or estate to determine when such entity must treat a payment of U.S. source FDAP income that is also a withholdable payment as having been paid by such entity to its partners, owners, or beneficiaries (as applicable depending on the type of entity).

(ii) Partnerships. An amount of U.S. source FDAP income that is also a withholdable payment is treated as being paid to a partner under rules similar to the rules prescribing when withholding is required for chapter 3 purposes as described in § 1.1441-5(b)(2)(i)(A).

(iii) Simple trusts. An amount of U.S. source FDAP income that is also a withholdable payment is treated as being paid to a beneficiary of a simple trust under rules similar to the rules prescribing when withholding is required for chapter 3 purposes as described in § 1.1441-5(b)(2)(ii).

(iv) Complex trusts and estates. An amount of U.S. source FDAP income that is also a withholdable payment is treated as being paid to a beneficiary of a complex trust or estate under rules similar to the rules prescribing when withholding is required for chapter 3 purposes as described in § 1.1441-5(b)(2)(iii).

(v) Grantor trusts. If an amount of U.S. source FDAP income that is also a withholdable payment is paid to a grantor trust, a person treated as an owner of all or a portion of such trust is treated as having been paid such income by the trust at the time it is received by or credited to the trust or portion thereof.

(vi) Special rule for an NWP or NWT. In the case of a partnership, simple trust, or complex trust that is an NWP or NWT, the rules described in paragraphs (a)(5)(ii) and (iii) of this section shall not apply, and U.S. source FDAP income that is also a withholdable payment is treated as being paid to the partner or beneficiary at the time the income is paid to the partnership or trust, respectively.

(vii) [Reserved] For further guidance, see § 1.1473-1(a)(5)(vii).

(6) [Reserved] For further guidance, see § 1.1473-1(a)(6).

(7) [Reserved] For further guidance, see § 1.1473-1(a)(7).

(b) [Reserved] For further guidance, see § 1.1473-1(b).

(1) [Reserved] For further guidance, see § 1.1473-1(b)(1) through (b)(1)(iii)(B).

(2) [Reserved] For further guidance, see § 1.1473-1(b)(2).

(i) through (iv) [Reserved] For further guidance, see § 1.1473-1(b)(2)(i) through (iv).

(v) Interests owned or held by a related person. For purposes of determining whether a specified U.S. person is a substantial U.S. owner in a foreign entity described in paragraphs (b)(2)(i) through (iv) of this section, if a specified U.S. person owns or holds, directly or indirectly, any interest in the foreign entity, that interest must be aggregated with any such interest in the foreign entity owned or held, directly or indirectly, by a related person. For purposes of the preceding sentence, a related person is a person or spouse of a person described in § 1.267(c)-1(a)(4), determined by reference to such specified U.S. person.

(3) through (7) [Reserved] For further guidance, see § 1.1473-1(b)(3) through (7).

(c) through (f) [Reserved] For further guidance, see § 1.1473-1(c) through (f).

(g) Expiration date. The applicability of this section expires on February 28, 2017.

[T.D. 9657, 79 FR 12861, Mar. 6, 2014; 79 FR 37180, July 1, 2014]