International Tax Blog

New IRS Practice Unit: 965 Transition Tax

Yesterday the IRS published a new practice unit titled “IRC 965 Transition Tax Overview.” This practice unit discusses the section 965 transition tax that was enacted as part of TCJA. Section 965 deals with the treatment of deferred foreign income upon the transition to the participation exemption system of taxation. You can find links to this practice unit on our Practice Units By Topic page. Read more →

8 Charts of Sec. 965 Transition Tax Regulation Examples

Last week the IRS issued proposed regulations under the Section 965 Transition Tax. We have created charts of the 8 examples included in Prop. Treas. Reg. §1.965-1(g). The examples include: Example 1: Special Non-Attribution Rule For P'ships in Defining Specified Foreign Corporations Example 2: Attribution Rule For P'ships in Defining Specified Foreign Corporations Example 3: Determination of Accumulated Post-1986 Deferred Foreign Income (All E&P was PTI & DFI was zero) Example 4: Determination of Status... Read more →

IRS Publication on New Section 965 Transition Tax

Yesterday the IRS published Publication 5292, How to Calculate Section 965 Amounts and Elections Available to Taxpayers. For more, see our videos on Section 965 - here and here and here. Read more →

New Video – Attribution Rules for 965 Specified Foreign Corporations

Code §965(e)(1) provides that the term “specified foreign corporation” means (A) any CFC and (B) any foreign corporation with respect to which one or more domestic corporations is a U.S. shareholder. For taxable years of foreign corporations beginning before January 1, 2018, under Code §951(b), a U.S. shareholder is a U.S. person that owns within the meaning of Code §958(a), or is considered as owning by applying the rules of ownership of Code §958(b), 10%... Read more →

Video on IRS FAQs on Section 965 Transition Tax Reporting

We have published a video discussing the recently released IRS FAQs on reporting of the Section 965 transition tax. The video can be viewed at our Youtube channel. Read more →

Code §965: Individuals Recognizing the Deemed Repatriation in 2017 vs. 2018

Pursuant to the new Tax Cuts and Jobs Act, individuals that own at least 10% of the stock of a “specified foreign corporation” will need to include in their gross income their share of the foreign corporation’s deferred foreign income. Code §965(a). A specified foreign corporation is any controlled foreign corporation (“CFC”) or other foreign corporation that has at least one U.S. corporation as a 10% shareholder. Code §965(e)(1). The deemed repatriation occurs by way... Read more →

Tax Cuts and Jobs Act Explanatory Video: Code §965 Deemed Repatriation from Foreign Corporations

Congress has passed the Tax Cuts and Jobs Act (“TCJA”) and President Trump is expected to sign the bill in the near future. The TCJA is the most significant piece of tax legislation in the last 30 years, and it makes substantial changes to the taxation of international transactions. One key component of the TCJA is a deemed repatriation of earnings held in certain foreign corporations. Code §965 will generally require “U.S. Shareholders” of “specified... Read more →