The U.S. IRS and Treasury have issued proposed regulations (REG-123112-19) on the treatment of certain interests in corporations as stock or indebtedness, which were published in the Federal Register on 4 November 2019. The proposed regulations would amend the Distribution Regulations under Section 385, which provide that the issuance of a debt instrument by a member of an expanded group to another member of the same expanded group in a distribution, or an economically similar transaction, may result in the treatment of the debt instrument as stock. The Distribution Regulations include a funding rule that treats as stock a debt...