Navigating CFC Dispositions, Liquidations, and Restructurings

Christopher M. Klug, Partner and Co-Founder | Basswood Counsel

Christopher M. Klug is a Partner and Co-Founder of Basswood Counsel (formerly Klug Counsel PLLC), an international tax planning attorney who represents businesses and individuals in domestic and international taxation, tax controversy, corporate and business planning, mergers and acquisitions, cross-border transactions, domestic and international estate planning, and trust administration. Drawing on decades of practice that pairs large-firm training with a hands-on boutique approach, he works alongside each client’s financial advisors, accountants, and leadership team so that tax strategy aligns with the client’s larger goals.

• Education & Credentials

Mr. Klug earned his LL.M. from Georgetown University Law Center, his JD from Michigan State University
College of Law, and his BA from Michigan State University. He is admitted to practice in Washington DC,
Illinois, Michigan, New York, Maryland, and Virginia.

• Recognition & Leadership

Mr. Klug founded Klug Counsel PLLC and served as its Managing Partner before co-founding its successor
firm, Basswood Counsel, where he leads the international tax planning practice. He also hosts the firm’s
Under the Basswood Tree podcast, exploring tax, corporate, and estate planning topics for a professional
audience.

• Professional Involvement

A former adjunct professor in the M.S. in Accounting program at Siena College, where he taught advanced
tax accounting, Mr. Klug maintains a deep grounding in subchapter C and S corporate taxation and
partnership taxation. Through Klug Counsel, he served as the firm’s primary contact for Integra
International, a global association of professional services firms.

• Experience

Mr. Klug has extensive experience with domestic and international income tax planning for companies,
including inbound and outbound mergers and acquisitions and other transactional tax matters, and he
applies his corporate and partnership taxation background to develop strategies across private equity,
estate planning, and family office engagements.

Gina Jeyoung Lee, Partner and Co-Founder | Basswood Counsel

Gina Jeyoung Lee is a Partner and Co-Founder of Basswood Counsel with extensive experience navigating U.S. tax law and tax treaties. She advises clients on individual and business tax planning, compliance, and controversies, together with domestic and international estate planning, and is committed to understanding each client’s unique circumstances so that her guidance fits their specific needs.

• Education & Credentials

Ms. Lee earned her JD, with a concentration in tax law and corporate and securities law, from the Antonin
Scalia Law School at George Mason University, and her BA and BS from Chapman University. She is
admitted to the California Bar and is fluent in Korean.

• Recognition & Leadership

As a Partner and Co-Founder of Basswood Counsel, Ms. Lee helped establish the firm and serves as one
of its public voices, announcing the firm’s membership in the Asian American Chamber of Commerce and
co-hosting episodes of its Under the Basswood Tree podcast.

Professional Involvement

Ms. Lee has participated in the Asian American Chamber of Commerce’s Women in Global Business panel
and speaks on cross-border compliance topics, including a podcast discussion of the FBAR and FATCA
reporting regimes.

• Experience

Ms. Lee handles complex tax and corporate matters spanning domestic and international taxation, private
equity funds, fund administration, and cross-border transactions. Her work includes representing clients
before the IRS, resolving intricate tax questions, and drafting the corporate documents needed to
implement each solution, and she has been instrumental in facilitating new business entity formation and
fund formation in compliance with corporate regulatory requirements.

SESSION 1 – How to Determine CFC Status and U.S. Shareholder Status | 2:30pm – 2:50pm

This session establishes the definitional foundation, examining what makes a foreign corporation a CFC and which owners qualify as U.S. shareholders, the threshold classifications on which every later planning
decision depends.

SESSION 2 – U.S. Tax Regimes affecting U.S. Shareholders of CFCs – Subpart F and GILTI/NCTI | 2:50pm – 3:10pm

Attention then turns to the operative regimes, exploring how Subpart F and GILTI/NCTI reach CFC earnings and shape the annual burden carried while ownership continues.

SESSION 3 – Understanding PTEP and Basis Adjustments | 3:10pm – 3:30pm

Speakers next unpack previously taxed earnings and profits, tracing how PTEP accounts arise, why careful tracking matters when distributions occur, and the corresponding basis adjustments that accompany them.

BREAK | 3:30pm – 3:40pm

SESSION 4 – Implications of IRC Section 1248 Dividend Recharacterization | 3:40pm – 4:00pm

Discussion then shifts to IRC section 1248, addressing when gain on a disposition of CFC stock is recharacterized as a dividend and what that treatment means for the selling shareholder.

SESSION 5 – Understanding How IRC Section 245A Dividend Received Deduction Factors Into the Planning | 4:00pm – 4:20pm

Building on the dividend theme, this segment considers the IRC section 245A dividend received deduction, where it fits within the planning, and how its availability influences the structures chosen.

SESSION 6 – Comparing CFC Exit Pathways Including Check to Box Elections, Taxable Liquidations, Section 332 Liquidations and The Impact of 367(b), Stock Sales, Section 338 Elections, and Foreign to Foreign Restructurings | 4:20pm – 4:40pm

The program closes by weighing the exit routes against one another, from elections and taxable liquidations through Section 332, 367(b), stock sales, Section 338, and foreign to foreign restructurings.