Interest charge domestic international sales corporations offer tax benefits, but taxpayers must carefully follow their requirements.
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Income & Exclusions
Qualified small business stock: The trap for foreign entities restructuring into a US corporation
A common cross-border reorganization can doom eligibility for the valuable gain exclusion without thoughtful planning.
Elections under the new Sec. 987 final regs.
Businesses with foreign branches receive new guidance on adjusting for currency exchange gain or loss.
Foreign trust transactions and large gifts addressed in proposed regs.
The proposed regulations implement Secs. 643(i), 679, 6039F, 6048, and 6677, which were added or modified to prevent efforts by U.S. taxpayers to use foreign trusts and offshore arrangements to avoid U.S. taxes.
Supreme Court hears arguments in challenge to Sec. 965 transition tax
At stake is up to $340 billion in tax revenue in case where couple is challenging tax that they say increased their liability by about $15,000 in 2017.
Rethinking international penalty administration
This item explores the Farhy decision and its impact on international penalties.
Sec. 987 foreign currency regulations applicability date extended again
On Aug. 15, 2022, the IRS announced that it intends to defer by one more year the applicability date of certain foreign currency regulations under Sec. 987.
CFCs: US shareholders’ income inclusions
This item clarifies the various categories of income inclusions a U.S. shareholder of a CFC may need to consider to the extent of its current-year earnings and profits or deficits and how to properly report and track any foreign inclusions related to E&P.
Foreign earned income exclusion: Pandemic-related relief
The IRS provides relief for taxpayers who would have qualified for the foreign earned income exclusion in 2019 and 2020 but for COVID-19.
No employer refund for tax payments made on employee’s behalf
The IRS determined that an employer funding an international assignee’s federal income tax obligations under a tax equalization policy may not seek a refund of excess withholding on that employee’s compensation.
COD income and cross-border considerations
This item provides an overview of the federal tax rules that apply to debt modifications and restructurings, with a primary focus on how U.S. corporate shareholders of CFCs are affected.
IRS issues more rules on GILTI tax
The IRS issued final regulations under the GILTI rules on the treatment of income subject to a high rate of foreign tax. At the same time, the IRS issued proposed rules conforming the GILTI high-tax exception rules with the Subpart F high-tax exception.
GILTI rules address income subject to high foreign tax rate
The IRS issued final regulations under the global intangible low-taxed income (GILTI) rules on the treatment of income subject to a high rate of foreign tax. At the same time, the IRS issued proposed rules conforming the GILTI high-tax exception rules with the Subpart F high-tax exception.
Taxpayer avoids Sec. 954(d)(1) Scylla but not Sec. 954(d)(2) Charybdis
A US company’s income earned by a Luxembourg
subsidiary from sales of products made by a Mexican branch of the subsidiary is taxable as foreign base company sales income under Subpart F.
Puerto Rico: A permanent tax deferral in a GILTI world?
Under the right set of circumstances, there may be a significant opportunity for tax savings in Puerto Rico.
Individual election to be taxed at corporate rates
Until now, shareholders had rarely invoked the Sec. 962 election to be taxed at corporate rates, and, as a result, most states have provided no specific guidance on how to treat a Sec. 962 election for state income tax purposes.
Country-by-country reporting: Considerations facing US multinationals
As the OECD member states plan to review the
CbC framework in 2020, this discussion highlights several common issues large U.S. MNEs may face.
Crime doesn’t pay — and may be taxable under Subpart F
One potentially important component of Subpart F
income under Sec. 952(a)(4) is illegal bribes, kickbacks, or other payments made by or on behalf of a CFC to a foreign government official, employee, or agent.
New US duties on certain EU and Chinese goods
This item discusses punitive tarriffs.
Proposed rules would govern digital content and cloud computing
The IRS proposed regulations to clarify how to classify transactions involving digital content and cloud computing.
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.
