Music in my handout, we see here a general definition of a specified domestic entity. This definition is directly from the Treasury of Regulation 1.603-6(a). It states that a specified domestic entity can be a domestic corporation, domestic partnership, or a trust described in IRC Section 7701(a)(30)(e). However, this entity must be formed or availed of for the purpose of holding directly or indirectly specified foreign financial assets. One of the reasons why I love international tax law is because every class requires further interpretation. Pretty much everything here is subject to further analysis. Let's break down this sentence about specified foreign financial assets. We have already discussed them, but let me provide a comprehensive description, or as comprehensive as I can make it at this point. These assets can be equivalent to the assets listed in your handout and must be reported on Form 8938. Now let's move on to domestic operations. This should be pretty easy to understand. It refers to a corporation formed under the laws of any state in the United States or a partnership formed under the laws of any state in the United States. However, there are certain rules that can make an entity formed in the United States a foreign partnership, but we won't discuss those today. Next, let's talk about trusts described in IRC Section 7701(a)(30)(e). This section describes two tests, the control test and the core test, that must be met for a trust to be considered a domestic trust. Now let's return to the part about forming or availing of an entity for the purpose of holding specified foreign financial assets. If you simply read the sentence, you might think that the IRS is referring to an entity formed with the intention of holding specified foreign financial assets. However, there is actually no...
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