2026-07-20
The IRS recently published PLR 202629003 in which the IRS granted an extension of time to obtain a FIRPTA withholding certificate. In the PLR, two related foreign corporations sold shares of a U.S. corporation (Domestic Subsidiary) to another related U.S. corporation (Acquiror). As part of the plan, Domestic Subsidiary was converted into an LLC under U.S. state law so that it became a disregarded entity of Acquiror. The combined share sale and deemed liquidation of Domestic Subsidiary were treated as a D reorganization. Domestic Subsidiary was a U.S. real property holding corporation. Code §897(c)(2).
A loss was recognized on the transaction but no FIRPTA withholding certificate was obtained to avoid withholding under Code §1445. The PLR granted an extension of time for the taxpayers to obtain the withholding certificate.
We created a chart of PLR 202629003.