On 8 December 2023, Treasury and the IRS released Notice 2024-16 announcing their intent to issue proposed regulations addressing the treatment of basis under section 961(c) in certain inbound nonrecognition transactions in which a domestic corporation acquires the stock a controlled foreign corporation (CFC) from another CFC. These proposed regulations are in addition to the highly anticipated proposed previously taxed earnings and profits (PTEP) regulations expected this year. According to the Notice, the proposed regulations will provide that, in the case of certain “covered inbound transactions,” the domestic acquiring corporation’s adjusted basis in the acquired CFC stock (as determined under section 334(b) or 362(b)) will be determined as if the transferor CFC’s section 961(c) basis were adjusted basis.