Recent court holdings allowing the credit against the tax may encourage similarly situated taxpayers, but procedural hurdles must be cleared.
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Credits
FTR notification requirement for taxpayers under LB&I examination
A foreign tax redetermination may require taxpayers under Large Business and International Division examination to notify the IRS, which will redetermine the U.S. tax owed.
Regulations create a new approach to the creditability of foreign taxes
Despite foreign tax credit guidance in recent years, questions remain regarding the Organisation for Economic Co-operation and Development’s Pillar 2 top-up taxes and related concerns.
Short-term relief for foreign tax credit woes
The IRS has eased some requirements of final regulations published in 2022, by temporarily removing so-called attribution requirements and the specific-cost-recovery requirement.
Corporate AMT: Unanswered questions about its foreign tax credit
Key issues related to the corporate AMT FTC are unsettled and could have a significant effect on a taxpayer’s corporate AMT liability.
Foreign tax credit: Changing from cash to accrual basis
Regulations provide regulatory authority for Treasury’s long-held position that an individual taxpayer who elects on a timely filed return to claim the foreign tax credit on the cash basis may not change to the accrual basis on an amended return.
Foreign tax credit requires consistency
For foreign tax credit purposes, a corporation must use the same method to characterize shares in a CFC that the CFC used to apportion its interest expense.
Tax credit did not independently arise under treaties
Given the proliferation of use of the model treaty language, most U.S. citizens living abroad will continue to find a foreign tax credit unavailable against their net investment income, even when that income is taxed by other countries.
Tax treaties do not provide a foreign tax credit against net investment income tax
A U.S. taxpayer living abroad was not entitled to take a foreign tax credit against her net investment income tax based on provisions in the United States–France and United States–Italy tax treaties.
Foreign taxes on PTEP can provide additional foreign tax credits
This item focuses on the potential increase in the Sec. 904(a) foreign tax credit limitation when PTEP
is distributed by a CFC to its corporate “U.S. shareholder.”
Final regs. issued on qualified improvement property under FDII, GILTI
Final regulations clarify the treatment of qualified improvement property in FDII and GILTI, and foreign tax credit transition rules address post-2017 NOL carrybacks to pre-2018 tax years.
Refundable credits and foreign tax credits
This item discusses how new rules would affect taxpayers’ ability to claim FTCs for foreign income taxes that are offset with refundable tax credits in a foreign jurisdiction.
How to treat foreign tax credits
The IRS issued final and proposed regulations covering a variety of issues involving deductions and credits for foreign taxes.
Foreign income taxes deemed paid and the PTEP rules
Treasury and the IRS temporary regulations include rules for determining foreign income taxes
deemed paid under Sec. 960, which pertains to the “deemed paid” foreign tax credit.
Foreign tax credit allocation and apportionment rules finalized
The IRS issued final and proposed regulations covering a wide variety of issues involving deductions and credits for foreign taxes.
Final regulations address covered assets acquisition rules
The IRS issued final regulations that govern covered asset acquisitions, which are used to increase foreign tax credits.
Final regs. issued on foreign tax credits
The IRS officially released final regulations providing guidance on determining foreign tax credits. The regulations include changes necessitated by the law known as the Tax Cuts and Jobs Act.
Final rules govern GILTI, Subpart F income, and foreign tax credits
The IRS issued final regulations on the Sec. 951A global low-taxed income inclusion and foreign tax credits, finalizing proposed rules issued in October and December 2018.
IRS proposes new foreign tax credit regulations
The IRS issued proposed regulations on the determination of the foreign tax credit after the changes in the law made by the Tax Cuts and Jobs Act.
Proposed foreign tax credit regulations issued
The IRS issued proposed regulations on the determination of the foreign tax credit after the changes in the law made by the Tax Cuts and Jobs Act.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
