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tax purposes. /1/ Consequently, an entity may be treated as transparent for U.S. tax purposes and as nontransparent for foreign tax purposes, or vice versa. Also, without such elective classification, inconsistencies result from different domestic entity classification rules. For purposes of discussion, an entity that is treated as transparent for tax purposes in one jurisdiction and as nontransparent in another is referred to as a "hybrid entity." /2/ When there is no classification conflict, a transparent entity may be referred to as a partnership for purposes of discussion.
[4] The problems resulting from a characterization difference between the two (and perhaps three) countries involved are threefold...
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