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Abstract This article discusses a U.S. Court of Appeals decision from August 2022 regarding the proper classification of a Liechtenstein Stiftung foundation for U.S. federal tax purposes. It also discusses at a high level the implications of different classifications. Founders (including non-U.S. persons) and their advisers should consider these implications when establishing foundations, particularly when the foundations’ beneficiaries are U.S. persons or if the foundations hold U.S. situs assets.
Georgiev et al. (2024) studied this question.