Taxation of Income Earned by Foreign Subsidiaries
Overview:
Differ from the "old" rules.
This self-study online course is part of the U.S. International Tax Certificate, a comprehensive learning program geared to help global finance and accounting professionals navigate the highly complex world of international taxation. This course can be purchased individually or as part of the U.S.International Tax: Inbound and Outbound Transactions bundle. You must purchase the bundle to earn the digital badge.
This CPE self-study course focuses on determining U.S. shareholder and Controlled Foreign Corporation (CFC) status under the new rules from tax reform. There is also discussion on how such rules differ from the "old" rules.
The course also provides a detailed session on the operating rules of subpart F income but not including section 956 and Global Intangible Low-Taxed Income (GILTI) inclusions. There is detailed discussion on international topics regarding calculating and reporting E&P for U.S. federal income tax purposes, as well as practical examples and application.
Also discussed in detail are international topics regarding Passive Foreign Investment Companies (PFICs) and foreign asset reporting for U.S. federal income tax purposes, as well as practical examples and application.
Objectives:
Learning Outcomes
- Identify a CFC and a U.S. shareholder
- Apply constructive stock attribution rules properly (*Tax reform)
- Distinguish how rules around indirect and direct ownership is applied
- Section 962 Elections
- Differentiate the different types of subpart F income
- Identify situations that would create subpart F income for a U.S. entity
- Calculate subpart F income for specific scenarios
- Apply specific rules providing exceptions and limitations for subpart F income
- Identify the importance of E&P in an International Context
- Recall E&P
- Calculate Common E&P Adjustments
- Apply E&P Concepts to common International Tax transactions
- Determine when you have PFICs
- Recognize the consequences of PFIC ownership
- Differentiate the tax implications of PFIC elections
- Recall PFIC reporting
- Recognize Foreign Asset reporting requirements beyond PFIC
Major Topics:
Key Topics
- Determination of CFC and U.S. Shareholders
- Application of constructive ownership rules
- New downward attribution
- Section 962
- All forms of subpart F income (FPHCI, sales, and services)
- Operating rules
- Exceptions
- Why is E&P Important
- Overview of the E&P Computation
- Common E&P Adjustments
- Applying E&P to Your Clients: What to look for and real-world examples
- Reporting E&P on Form 5471
- Tax issues resulting from E&P issues
- Definition of a PFIC and Examples
- Shareholder Taxation of PFICs without QEFs
- Shareholder Taxation of PFICs with QEFs
- Mark-to-market Elections (Mark-to-market 1296)
- Retroactive Relief
- Foreign Asset Reporting Requirements
- Excess Distribution 1291
- Qualified Electing Funds 1293 & 1295
- FBARs and 8938s