Distressed Debt Tax Opportunities For Foreign Investors

Law360 (May 15, 2020, 3:52 PM EDT) -- The economic troubles that many businesses are facing because of the coronavirus pandemic have given rise to significant interest by investors in acquiring, or investing in funds that acquire, distressed debt instruments.[1] This article discusses some key potential U.S. federal income tax[2] opportunities and challenges for foreign investors in U.S. distressed debt.

Background

Foreign investors may earn interest income on debt issued by U.S. companies free of U.S. tax, if certain conditions are met. Foreign investors may also earn income from the sale or retirement of debt issued by U.S. companies free of U.S. tax, if certain conditions are met....

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