# 26 U.S.C. § 269B: Stapled entities Source: OLRC release point 119-134 . Cite pinpoints as 26 U.S.C. § 269B(a)(1). ## § 269B(a) General rule Except as otherwise provided by regulations, for purposes of this title— **§ 269B(a)(1)** if a domestic corporation and a foreign corporation are stapled entities, the foreign corporation shall be treated as a domestic corporation. **§ 269B(a)(2)** in applying section 1563, stock in a second corporation which constitutes a stapled interest with respect to stock of a first corporation shall be treated as owned by such first corporation, and **§ 269B(a)(3)** in applying subchapter M for purposes of determining whether any stapled entity is a regulated investment company or a real estate investment trust, all entities which are stapled entities with respect to each other shall be treated as 1 entity. ## § 269B(b) Secretary to prescribe regulations The Secretary shall prescribe such regulations as may be necessary to prevent avoidance or evasion of Federal income tax through the use of stapled entities. Such regulations may include (but shall not be limited to) regulations providing the extent to which 1 of such entities shall be treated as owning the other entity (to the extent of the stapled interest) and regulations providing that any tax imposed on the foreign corporation referred to in subsection (a)(1) may, if not paid by such corporation, be collected from the domestic corporation referred to in such subsection or the shareholders of such foreign corporation. ## § 269B(c) Definitions For purposes of this section— **§ 269B(c)(1) Entity.** The term “entity” means any corporation, partnership, trust, association, estate, or other form of carrying on a business or activity. **§ 269B(c)(2) Stapled entities.** The term “stapled entities” means any group of 2 or more entities if more than 50 percent in value of the beneficial ownership in each of such entities consists of stapled interests. **§ 269B(c)(3) Stapled interests.** Two or more interests are stapled interests if, by reason of form of ownership, restrictions on transfer, or other terms or conditions, in connection with the transfer of 1 of such interests the other such interests are also transferred or required to be transferred. ## § 269B(d) Special rule for treaties Nothing in section 894 or 7852(d) or in any other provision of law shall be construed as permitting an exemption, by reason of any treaty obligation of the United States heretofore or hereafter entered into, from the provisions of this section. ## § 269B(e) Subsection (a)(1) not to apply in certain cases **§ 269B(e)(1) In general.** Subsection (a)(1) shall not apply if it is established to the satisfaction of the Secretary that the domestic corporation and the foreign corporation referred to in such subsection are foreign owned. **§ 269B(e)(2) Foreign owned.** For purposes of paragraph (1), a corporation is foreign owned if less than 50 percent of— **§ 269B(e)(2)(A)** the total combined voting power of all classes of stock of such corporation entitled to vote, and **§ 269B(e)(2)(B)** the total value of the stock of the corporation, is held directly (or indirectly through applying paragraphs (2) and (3) of section 958(a) and paragraph (4) of section 318(a)) by United States persons (as defined in section 7701(a)(30)). ## Regulations - [Treas. Reg. § 1.269B-1](/26/reg/1.269B-1.md): Stapled foreign corporations. (interprets § 269B) - [Treas. Reg. § 301.269B-1](/26/reg/301.269B-1.md): Stapled foreign corporations. (interprets § 269B) ## Final rules - [80 FR 56904](https://www.federalregister.gov/documents/2015/09/21/2015-23603/reorganizations-under-section-368a1f-section-367a-and-certain-reorganizations-under-section-368a1f) (2015): Reorganizations Under Section 368(a)(1)(F); Section 367(a) and Certain Reorganizations Under Section 368(a)(1)(F) - [70 FR 43757](https://www.federalregister.gov/documents/2005/07/29/05-15059/treatment-of-a-stapled-foreign-corporation-under-sections-269b-and-367b) (2005): Treatment of a Stapled Foreign Corporation under Sections 269B and 367(b) ## Connections Cites: § 318 Constructive ownership of stock; § 894 Income affected by treaty; § 958 Rules for determining stock ownership; § 1563 Definitions and special rules; § 7701 Definitions Cited by: none ## Amendments - 1984-07-18: [Pub. L. 98-369](/26/act/98-369.md), 98 Stat. 669 - 1986-10-22: [Pub. L. 99-514](/26/act/99-514.md), 100 Stat. 2829