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.
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International Tax
Customs duty refunds on transfer-pricing adjustments
This discussion explores key considerations to keep in mind for claiming customs duty refunds on transfer-pricing adjustments.
Considerations for multinationals with US and Maltese operations
This discussion explores certain issues that multinationals should consider when deciding whether to use Malta as part of their worldwide operations.
Differences between transfer pricing and financial reporting valuations
The difference in valuation standards between financial reporting and transfer pricing leads to the use of different valuation methods for each. This may significantly affect the valuation of the asset for transfer-pricing purposes.
IRS’s FATCA enforcement fell short, TIGTA says
Initial plans for the Foreign Account Tax Compliance Act’s regime of reporting US taxpayers’ foreign bank accounts and other financial assets largely have stalled, the Treasury Inspector General for Tax Administration reports.
IRS eases application process for US residency certification
New procedures will facilitate residency certification where the Internal Revenue Service has not yet processed the applicant’s tax return.
Puerto Rico residents: Scope of income tax exemption for capital gains
The tax advantages available in Puerto Rico have recently captured the interest of both taxpayers and the IRS.
Complying with new schedules K-2 and K-3
What partnerships, S corporations, and others with foreign partnership interests need to know for tax year 2021 and beyond.
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.
Final regulations affect owners of foreign stock
Final and proposed regulations cover PFIC and CFC stock held through domestic partnerships and S corporations.
IRS extends withholding date for certain PTP transfers, distributions
The IRS announced that it will amend the regulations under Secs. 1446(a) and 1446(f) to defer the applicability date of certain provisions by one year to Jan. 1, 2023.
Reversing a gap period transaction through late check-the-box election
The IRS permitted a taxpayer effectively to undo planning undertaken during the so-called gap period (described later).
Senate Finance Committee releases tax provisions of Build Back Better Act
The Senate Finance Committee’s text includes changes from the House’s version of the bill, including a removal of the House’s increase in the SALT deduction cap.
Tax provisions in the Build Back Better Act
The Build Back Better Act contains a large number of tax provisions, ranging from an extension of the advance child tax credit, to a wide variety of green energy tax incentives, and a minimum tax on corporations.
IRS provides new guidance on accounting method changes for CFCs
For a limited time, the IRS is allowing automatic change procedures for CFCs changing to the ADS method and has clarified the process and certain aspects of audit protection.
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.”
Penalty for failure to report distribution from foreign trust not reduced
The penalty for failure to report a distribution from a foreign trust is not reduced when the trust beneficiary is also the trust owner.
Automatic procedures to change a CFC’s depreciation method
The IRS issued Rev. Proc. 2021-26, which contains procedures for certain foreign corporations to obtain automatic consent to change their methods of accounting for depreciation to the alternative depreciation system.
Foreign notional interest regimes may hinder deductions of US subsidiaries
Inbound structures involving interest or royalty
payments by U.S. subsidiaries to foreign affiliates may trigger anti-avoidance rules where the foreign affiliates operate in countries that have notional interest deduction tax regimes.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
