Executive summaryOn 21 September 2020, the United States (US) Treasury Department and the Internal Revenue Service (IRS) released final regulations (T.D. 9919) under Internal Revenue Code1 Section 864(c)(8) that provide guidance for determining the treatment of gain or loss recognized by a foreign person on the sale of an interest in a partnership that is engaged in the conduct of a trade or business within the United States (US trade or business). The final regulations largely adopt proposed regulations that were issued on 20 December 2018 (REG-113604-08), with certain modifications.The final regulations generally retain the proposed regulations’ three-step approach for determining effectively connected gain...