Foreign Shipping Co. Can't Escape US Tax On $3.6M

Law360, New York (March 28, 2017, 7:32 PM EDT) -- A foreign shipping company incorporated in the Marshall Islands failed to get a tax exemption for $3.6 million in the U.S. after the U.S. Tax Court on Tuesday upheld the validity of IRS regulations pertaining to the ownership of foreign corporations' stocks.

Good Fortune Shipping SA, which had issued all its stock shares in 2007 in bearer form — an unregistered form of stock certificates that do not identify the owner — had tried to claim that $3.6 million of its U.S. source gross transportation income, or USSGTI, should be excluded from its gross income in the U.S. and that the...

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