Subpart F

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.

IRS issues Sec. 965 transition tax regs.

The IRS issued proposed regulations on the Sec. 965 transition tax that requires U.S. shareholders of deferred foreign income corporations to pay tax on post-1986 deferred income.

Sec. 962 to the Rescue

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.

Regs. Tighten Form 5472 Filing Requirements

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 Software Regulations and Subpart F

The proper U.S. tax treatment of a sale or license of computer programs through a foreign subsidiary is challenging and potentially expensive in cash taxes. A practitioner must consider a variety of aspects and value exchanged in transactions and transfers when assessing transactions in software.

Newsletter Articles

TAX REFORM

Traps for the unwary: Tax Cuts and Jobs Act changes

By now many of us are familiar with the various provisions of the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97. Here is a list of changes together with (perhaps) unexpected nuances.

DEDUCTIONS

Qualified business income deduction regs. and other guidance issued

The package includes final regulations, guidance on how to calculate W-2 wages, a safe-harbor rule for rental real estate businesses, and new proposed rules on the treatment of previously suspended losses.