🌍 FIRPTA Alert: IRS Notice 2025-45 (Effective Aug 2025)
IRS Notice 2025-45 proposes targeted FIRPTA changes for certain inbound F reorganizations involving publicly traded foreign corporations. Learn what the guidance means for cross-border restructuring a
IRS Notice 2025-45 Issued: August 19, 2025
The IRS has proposed targeted changes to FIRPTA under Notice 2025-45, offering streamlined treatment for certain inbound F reorganizations involving publicly traded foreign corporations.
What is an inbound F reorganization?
It’s a specific type of corporate restructuring where a foreign company “redomiciles”, meaning it changes its corporate residence, from a foreign jurisdiction to the U.S., often by merging into or converting to a U.S. corporation. This process can involve complex tax considerations, especially when U.S. real property interests are involved.
Key points from Notice 2025-45:
Applies to public foreign companies redomiciling to the U.S. via an inbound F reorganization
Requires the foreign company to have been publicly traded for at least 3 years, and the resulting U.S. corporation to remain public for at least 1 year
Shareholders owning less than 5% are exempt from FIRPTA declarations
Normal market trading won’t invalidate the reorganization
Taxpayers may rely on this guidance immediately
IRS is accepting comments through October 20, 2025
This guidance brings much-needed clarity to an area that has caused significant uncertainty for inbound reorganizations involving U.S. real property interests.
Anyone involved in cross-border entity structuring, FIRPTA compliance, or international ownership of U.S. real estate will want to take a close look at this.
