Reducing GILTI liability using CFC accounting method change procedures
Methods of accounting may be an effective tool in tax planning for GILTI; however, method change procedures for CFCs differ from procedures for domestic taxpayers.
CFCs
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.
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.
Cross-border M&As post-TCJA: Three things advisers should know
This item highlights three often overlooked or misunderstood factors potentially disrupting international transactions.
Unintended CFC downward attributions get safe harbor
U.S. shareholders who own stock in foreign corporations were given a safe harbor by the IRS, making it easier for them to establish that they are not shareholders in a controlled foreign corporation.
Demystifying the new international E&P rules
This discussion provides a summary of some of the basic previously taxed earnings and profits ordering rules likely to apply to distributions made by controlled foreign corporations .
Treasury reverses position on qualifying income for RICs invested in certain foreign corporations
The final rule allows a RIC invested in CFCs and PFICs to treat the required CFC inclusion or PFIC inclusion respectively, as qualifying income for purposes of a RIC’s qualifying income test.
Foreign-derived intangible income guidance addresses many open questions
Sec. 250 allows domestic corporations a deduction for their “foreign-derived intangible income.” Proposed regulations that were issued earlier this year answer many outstanding questions regarding the calculation of this new deduction but also include documentation requirements that may prove onerous for some taxpayers.
CFC worthless stock deductions after tax reform
This discussion focuses on the GILTI and BEAT implications for the benefit received by a U.S. corporation reporting a worthless stock deduction under Sec. 165(g) for a CFC’s stock.
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.
New CFC group election: Possible benefits
The TCJA substantially modified Sec. 163(j) so that the business interest expense in a tax year is limited to the sum of the taxpayer’s business interest income, 30% of the taxpayer’s adjusted taxable income, and the taxpayer’s floor plan financing interest.
International tax considerations for the blockchain industry
Delineating the international tax considerations for a blockchain enterprise, a new industry involving new technology with almost no regulatory guidance, can be difficult.
GILTI: A new age of global tax planning
Only after careful examination of GILTI can U.S. taxpayers assess whether the TCJA benefits or harms their foreign earnings.
IRS issues Q&A guidance on Sec. 965 transition tax issues for 2018 returns
The IRS issues guidance for application of overpayments or refunds for taxpayers that opt to pay the Sec. 965 transition tax in eight annual installments.
Missing links: Tax reform’s impact on the value chain
In a changing landscape, U.S. C corporation multinationals should consider reevaluating their value chain.
Unintended consequences: How a drafting glitch turned Sec. 958 upside down
This item provides an overview of the Sec. 958 constructive ownership rules, explores the “glitch" and its consequences, and discusses planning options to mitigate the negative effects.
Considerations when computing tested income and tested loss of a CFC
This discussion focuses on the computation of tested income or loss and comments on the mechanics of the computation, clarifies common misconceptions, and uncovers snags that may catch unsuspecting practitioners who have little experience navigating the GILTI provision.
U.S. corporate shareholders would no longer be subject to income inclusion rules
The IRS issued proposed regulations providing that Sec. 956, which requires an income inclusion by U.S. shareholders of controlled foreign corporations (CFCs) that invest in U.S. property, should not apply to corporate shareholders.
