Treating a Sec. 956 inclusion as not a distribution for purposes of Regs. Sec. 1.952-1(f)(2)(iii) leads to unintended results under certain fact patterns.
International tax provisions, including the anti-deferral regime and mechanics of the foreign tax credit, can present significant and unique challenges to maintaining a tax-efficient structure.
Previously taxed income rules were designed to prevent double taxation of a controlled foreign corporation's earnings. Keeping track of a foreign corporation's earings and profits under the rules can be complicated.
The IRS is amending the rules for filing Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.
Foreign Corporations: Procedures and Pitfalls in Adopting and Changing Methods of Accounting for Purposes of Determining E&P
This item provides a high-level discussion of the general timing for certain foreign corporations’ adoption of methods of accounting for purposes of determining E&P, the procedural rules regarding how such foreign corporations change their method of accounting, and the importance of understanding when and how a method is adopted in light of the increased limitations such foreign corporations may face in changing methods.
The IRS late last year released final regulations on the rules for foreign base company sales income (FBCSI) under Sec. 954(a)(2) and Regs. Sec. 1.954-3(b).
When a controlled foreign corporation (CFC) sells property used in its active business, any gain generally is not treated as subpart F income includible in its U.S. shareholders’ taxable income.