§ 1.7874-3T - Substantial business activities (temporary).

§ 1.7874-3T Substantial business activities (temporary).

(a) through (b) (3) [Reserved] For further guidance, see § 1.7874-3(a) through 1.7874-3(b)(3).

(4) Tax residence of foreign acquiring corporation. The foreign acquiring corporation is subject to tax as a resident of the relevant foreign country.

(c) through (d) (9) [Reserved] For further guidance, see § 1.7874-3(c) through (d)(9).

(10) The term relevant financial statements means financial statements prepared consistently for all members of the expanded affiliated group in accordance with either U.S. Generally Accepted Accounting Principles (U.S. GAAP) or the International Financial Reporting Standards (IFRS) used for the expanded affiliated group's consolidated financial statements, but, if, after the acquisition described in section 7874(a)(2)(B)(i), financial statements will not be prepared consistently for all members of the expanded affiliated group in accordance with either U.S. GAAP or IFRS, then, for each member, financial statements prepared in accordance with either U.S. GAAP or IFRS. The relevant financial statements must take into account all items of income generated by all members of the expanded affiliated group for the entire testing period.

(d) (11) through (f)(1) [Reserved] For further guidance, see § 1.7874-3(d)(11) through (f)

(1) .

(2) Paragraphs (b)(4) and (d)(10) of this section. Paragraph (b)(4) of this section applies to domestic entity acquisitions completed on or after November 19, 2015. Paragraph (d)(10) of this section applies to domestic entity acquisitions completed on or after April 4, 2016. For domestic entity acquisitions completed on or after June 3, 2015, and before April 4, 2016, however, taxpayers may elect to apply paragraph (d)(10) of this section.

(g) Expiration date. The applicability of paragraphs (b)(4) and (d)(10) of this section expires on or before April 4, 2019.

[T.D. 9761, 81 FR 20896, Apr. 8, 2016, as amended at 81 FR 40811, June 23, 2016]