Discussion:Equipment invested to another corporation in foreign country
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Discussion Forum Index --> Basic Tax Questions --> Equipment invested to another corporation in foreign country
Discussion Forum Index --> Tax Questions --> Equipment invested to another corporation in foreign country
| 2008-06-26 | |
| A U.S. Corp. paid for equipment and has the title. Then it was invested and delivered to another corporation in foreign country which that U.S. Corp. has 100% ownership. Per depreciation rules, it says it should be used in the taxpayer's business or income-producing activity. Then, is there any way the U.S. Corp. can take depreciation of those invested equipment? What would be the best tax treatment for the U.S. Corp? | |
| 26 June 2008 | |
| James, you are more likely to get useful answers if you first complete your profile. Just click on your name in your post above. That will take you to your user page, where you can click on the "edit this page" tab at the top and replace the boilerplate with your own information, and save the page. | |
| 27 June 2008 | |
| Thanks, James.
I don't see how the U.S. Parent can depreciate this property; it isn't owned by the US Parent, it's owned by the non-US Sub. Wouldn't it be better to lease the equipment to Sub? Then Parent would have rental income and could depreciate the property. Bear in mind that these transactions must be at arm's length to sustain challenge under IRC Sec. 482 (reallocation of income and expenses between related parties to clearly reflect income). | |
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