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.
While the statutory language to the high-tax exception was unchanged by the TCJA, other amendments affect the determination of whether an item of income meets the high-tax exception.
This discussion addresses the proposed changes to the operation of Sec. 956, potential planning opportunities under the proposed regulations, and certain outstanding issues.
Sec. 856(n)(1)(a) specifies that passive foreign exchange gain (as defined in Sec. 856(n)(3)) for any tax year is not gross income for purposes of Sec. 856(c)(2).
This article discusses the GILTI regime and the rules in proposed regulations and some of the most notable implications.
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.
This item discusses new trends in states’ conformity with or decoupling from Sec. 965.
The new "repatriation tax" under the TCJA may cause individual partners and shareholders of flowthrough entities to obtain a deferred tax rate benefit by making this election.
Foreign-derived intangible income deduction: Tax reform’s overlooked new benefit for U.S. corporate exporters
One new opportunity created by the TCJA is the foreign-derived intangible income deduction in Sec. 250(a).
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.
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.
In Letter Ruling 200825009, the IRS addressed for the first time the subpart F treatment of gains on sale of surplus carbon dioxide (CO2) emissions allowances.
Final regulations were issued on the application of the manufacturing exception to certain contract manufacturing arrangements—arrangements where a CFC does not itself perform the manufacturing but instead contracts with a third party to perform the manufacturing.
Treasury published final, temporary, and proposed regulations under Sec. 954 addressing the treatment of contract manufacturing arrangements and the branch rules applicable to foreign base company sales income (FBCSI), a type of subpart F income applicable to the sale of inventory.