NEW UPDATES FOR MICRO-CAPTIVES

Final regulations announced 

On January 10, 2025, the Department of the Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) issued final regulations (Regs. Secs. 1.6011-10 and 1.6011-11) related to micro-captive insurance companies. The final regulations outline when a micro-captive insurance company is deemed to be participating in a listed transaction or a transaction of interest and provides guidance on filing obligations for micro-captive insurance companies and related parties, including insured entities, owners, and material advisors.

LEARN MORE FROM OUR MICRO-CAPTIVE SERIES

The articles below go through the essential information contained in the Final Regulations.

• How Did We Get Here? The History of Notice 2016-66 and the Micro-Captive Regulations
• What Is a Listed Transaction, What Is a Transaction of Interest, and Why Does It Matter?
• When Is a Micro-Captive Insurance Company Deemed to Be Participating in a Listed Transaction?
• When Is a Micro-Captive Insurance Company Deemed to Be Participating in a Transaction of Interest?
• Flowchart: Determining Whether a Micro-Captive Transaction is a Listed Transaction or a Transaction of Interest
• What Are the Reporting Requirements for a Micro-Captive Insurance Company That Is Deemed to Be Participating in a Listed Transaction or a Transaction of Interest?
• What Information Is Required to Be Reported on Form 8886, Reportable Transaction Disclosure Statement, with Respect to Micro-Captive Listed Transactions and Transactions of Interest?
• How Can a Micro-Captive Revoke Its Section 831(b) Election?
• What Is a “Successor Captive” and What Do the Final Regulations Say About Them?

We highly recommend you contact a member of the Larson captive team to discuss the aspects of these regulations that apply directly to your captive to ensure you have the most applicable information for your situation.