International Tax Blog

Flow-Thru Symbols: An Up-Side-Down “Funnel” Theme

For my charts, I typically show flow-thru entities as rectangles with small triangles in the lower right corner. I think of the triangle as an up-side-down funnel. The funnel allows the income to flow from the entity upwards to its owner. For entities that are true partnerships, I typically show them as triangles to reflect their flow-thru nature. S corporations are generally flow-thru entities. To continue the funnel theme, I show S corporations as trapezoids,... Read more →

Multiple new situational charts published

We recently added 12 new situational tax charts to AndrewMitchel.com (charts listed in topical order and charts listed in alpha-numeric order). We have over 1200 charts for FREE on our website. The recently published charts include: Rev. Rul. 70-409 (Liquidating Distribution of Shareholders' Notes Was a Distribution of Money) Reg. 1.881-5(h), Example (US VI Corp Was Not Less Than 25% Owned By Foreign Persons) Reg. 1.904-4(f)(4)(i), Example 1 (Determination of Foreign Branches and Foreign Branch... Read more →

7 New Tax Charts Published

Today we published 7 new situational tax charts to AndrewMitchel.com (charts listed in topical order and charts listed in alpha-numeric order). We have over 1200 charts for FREE on our website. The recently published charts include: Reg. 1.1291-1(b)(8)(iv), Example 1 (Indirect Ownership of a PFIC Partly Thru a U.S. Corp) Prop. Reg. 1.1291-1(b)(8)(iv)(B), Example 2 ("Top-Down" Approach For Ownership of a PFIC Thru Foreign Partnerships) Prop. Reg. 1.1297-1(b)(2), Example (Consolidated Group Dividends Not Excluded From... Read more →

5 New Tax Charts Published

Today we published 5 new situational tax charts to AndrewMitchel.com (charts listed in topical order and charts listed in alpha-numeric order). We have over 1200 charts for FREE on our website. The recently published charts include: Rev. Rul. 2008-39 (Upper-Tier Partnership Sec. 212 Expenses Must be Separately Stated) Reg. 1.267(a)-3(b)(4), Example 1 (Interest Expense of Accrual Taxpayer Not Deductible Until Paid) Prop. Reg. 1.864-6(c)(3)(i), Example 1 (NRA With a US Tax Home Selling Foreign-Produced Inventory... Read more →

11 New Tax Charts

We recently added 11 new charts to andrewmitchel.com (listed in topical order and listed in alpha-numeric order). We now have more than 1,200 charts available. The recently added charts include: Reg. 1.960-2(b)(5), Example (Deemed Paid Foreign Income Taxes: Subpart F Income Inclusion) Reg. 1.960-2(c)(7)(i), Example 1 (Deemed Paid Foreign Income Taxes: GILTI Inclusion) Reg. 1.960-2(c)(7)(ii), Example 2 (Deemed Paid Foreign Income Taxes: GILTI Inclusion, CFC Owned Thru P'ship) Reg. 1.960-3(e)(1), Example 1 (Foreign Income Taxes... Read more →

8 New Charts Of Examples Regarding Classification of Cloud Transactions & Computer Programs

On August 24, 2019, the Treasury Department and the IRS issued proposed regulations regarding the classification of cloud transactions for purposes of the international provisions of the Code. The proposed regulations also modify the rules for classifying transactions involving computer programs, including by applying the rules to transfers of digital content. We have created charts of certain examples included in the proposed regulations. View these charts and over a thousand other free charts at andrewmitchel.com... Read more →

Eaton Corp. v. Commr., 152 T.C. No. 2 (2019)

Earlier this week the Tax Court concluded that the earnings and profits (E&P) of certain upper-tier CFCs was increased by the amount of Subpart F Income inclusions and Code §956 inclusions (Code §951(a) inclusions) that flowed up from lower-tier CFCs through a U.S. partnership. Below is a chart of the entity structure in the Eaton case. Read more →

Rental of Real Estate to Yourself

A taxpayer cannot rent property to him or herself. This is similar to the concept that a taxpayer cannot pay themselves a salary. For example, if a taxpayer has a sole proprietorship and he or she reports the income and expenses of that business on Schedule C of Form 1040, the taxpayer is not able to deduct salary expense on the Schedule C for “wages” paid to him or herself. This makes sense because a... Read more →

12 New Tax Charts

We recently added 12 new situational charts to andrewmitchel.com (listed in topical order). View these charts and over a thousand other free charts at andrewmitchel.com (listed in alpha-numeric order). Bass (Swiss Corporation Was Respected As a Separate Entity) Rev. Rul. 79-371 (Gift of Installment Note Triggered Gain) Rev. Rul. 80-58, Situation 1 (Rescission of Contract Within Same Taxable Year) Rev. Rul. 80-58, Situation 2 (Rescission of Contract in Following Taxable Year) Rev. Rul. 80-164 (Cash... Read more →

13 Charts of Code §958 Regulation Examples

We have created charts of the 13 of the examples included in Treas. Reg. §§1.958-1 and -2. Treas. Reg. §1.958-1 contains 5 examples demonstrating attribution through direct and indirect ownership. These regulations provide a limited form of attribution primarily for use in determining the amount taxable to a U.S. shareholder under Code §951(a) (Subpart F Income). Treas. Reg. §1.958-2 contains 8 examples demonstrating attribution through constructive ownership. These regulations provide that the attribution rules of... Read more →

10 Charts of Sec. 199A QBI Regulation Examples

Last week the IRS issued proposed regulations under Section 199A regarding the qualified business income (QBI) deduction. We have created charts of 10 of the examples included in Prop. Treas. Reg. §1.199A-1(c)(3) and (d)(4). We also created a video discussing the first four examples. See our YouTube channel. The examples include: 1.199A-1(c)(3) Ex. 1, QBI Ded'n, Below Threshold: TI Limit (No CG) Ex. 2, QBI Ded'n, Below Threshold: TI Limit (With CG) Ex. 3, QBI... 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 →

8 New Tax Charts

We recently added 8 new situational charts to andrewmitchel.com (listed in topical order). View these charts and hundreds of other free charts at andrewmitchel.com (listed in alpha-numeric order). Buck (Pre-1954 Code: Grantor Trust Due to Retained Sprinkle Power) Carson (Grantor Held Power to Sprinkle Income Among Beneficiaries) Rev. Rul. 67-70 (Transfer of an Installment Note to a Grantor Trust Was Not a Disposition) Rev. Rul. 67-167 (Transfer of an Installment Note to a Nongrantor Trust... Read more →

5 New Tax Charts

We have added 5 new situational charts to andrewmitchel.com (listed in topical order). View these charts and hundreds of other free charts at andrewmitchel.com (listed in alpha-numeric order). Rev. Rul. 2007-49, Situation 1 (Vested Stock to Nonvested Stock with No Exchange) Rev. Rul. 2007-49, Situation 2 (Vested Stock to Nonvested Stock In Tax-Free Reorg Exchange) Reg. 1.987-2(c)(10), Example 10 (Section 987: Contribution of Assets to Corporation) Reg. 1.987-2(c)(10), Example 11 (Section 987 QBU: Circular Transfers)... Read more →

5 New Tax Charts

We have added 5 new situational charts to andrewmitchel.com (listed in topical order). View these charts and hundreds of other free charts at andrewmitchel.com (listed in alpha-numeric order). Rev. Rul. 73-157, Situation 1 (Installment Sale Method Not Available When Sold Thru Son As Conduit) Rev. Rul. 73-157, Situation 2 (Installment Sale Method Not Available When Sold Thru Corp As Conduit) Reg. 1.987-2(c)(10), Example 4 (Section 987: Sale of Property by a Section 987 QBU) Reg.... Read more →

5 New Tax Charts

Today we added 5 new situational charts to andrewmitchel.com (listed in topical order). View these charts and hundreds of other free charts at andrewmitchel.com (listed in alpha-numeric order). Grecian Magnesite Mining (Foreign Partner's Gain on Sale of U.S. Partnership Interest Not Effectively Connected Income) Rev. Rul. 2017-9, Situation 1 (351 Exchange (South) Followed By Spin-Off (North)) Rev. Rul. 2017-9, Situation 2 (Gain Recognized On South Transaction Due Boot Received Not Being Distributed) Reg. 1.987-2(c)(10), Ex.... Read more →

Tax Court Declines to Follow Rev. Rul. 91-32

Last week, the Tax Court released an important opinion in Grecian Magnesite Mining, Industrial & Shipping Co., SA v. Commissioner, 149 T.C. No. 3, where the court declined to follow Rev. Rul. 91-32. For more than 25 years the IRS has maintained that gain on a foreign partner’s disposition of an interest in a partnership that conducts business in the U.S. is subject to U.S. tax. To arrive at this conclusion, the IRS applied the... Read more →

5 New Tax Charts

Today we added 5 new situational charts to andrewmitchel.com (listed in topical order). View these charts and hundreds of other free charts at andrewmitchel.com (listed in alpha-numeric order). Reg. 1.987-2(c)(10), Example 1 (Section 987: Disregarded Interbranch Transaction) Reg. 1.6038A-2(b)(9), Example 1 (5472 Reporting for U.S. Disregarded Entity) Reg. 1.6038A-2(b)(9), Example 2 (5472 Reporting for Transactions Between U.S. Disregarded Entities) PLR 9612017 (Gain on Sale of S Corporations Was Foreign Source Income) PLR 200620016 (Breach of... Read more →

5 New Tax Charts

Today we added 5 new situational charts to andrewmitchel.com (listed in topical order). View these charts and hundreds of other free charts at andrewmitchel.com (listed in alpha-numeric order). Inverworld (Cayman Island Company Was Engaged in a U.S. Trade or Business and Had U.S. ECI) Rev. Rul. 66-86 (Section 2036 Does Not Apply to Life Interest In Trust For Inherited Usufruct) Reg. 1.957-1(c), Example 8 (>50% Ownership of Value & At Least 10% of Vote Makes... Read more →

5 New Tax Charts

Today we added 5 new situational charts to andrewmitchel.com dealing with Section 987 Branch Transactions. Reg. 1.987-1(b)(7), Example 1 (Not a Section 987 QBU: Disregarded Entity Holding Stock & Servicing a Debt) Reg. 1.987-1(b)(7), Example 2 (Section 987 QBU: Disregarded Entities with Active Businesses) Reg. 1.987-1(b)(7), Example 3 (Section 987 QBU: Election to Treat Separate QBUs as One QBU) Reg. 1.987-1(b)(7), Example 4 (Section 987 QBU: Aggregate Partnerships) Reg. 1.987-1(b)(7), Example 5 (Section 987 QBU:... Read more →

15 New Tax Charts

Today we added 15 new situational charts to andrewmitchel.com dealing with a variety of topics. Am. Metallurgical Coal Co. v. Commr. T.C. Memo 2016-139: Transfer Was For Equity And Not For Debt; Post Transfer Payments Were Dividends In Re DeCoro USA Ltd U.S. Bankruptcy Court, M.D.N.C., Case No. 09-10846C-11G: Inbound Furniture Sales: Sales Comm. Model vs. Distributor Model Revenue Ruling 67-202: Contribution & Liquidation Was An Asset Reorganization & Section 269 Did Not Apply Revenue... Read more →

PFIC Mark-to-Market Election Charts & Videos

Today we added 12 new situational charts to andrewmitchel.com dealing with mark-to-market elections for PFICs. We also uploaded 12 new videos to our YouTube channel that briefly discuss each of the new charts. The charts and videos include: Gain from MTM Election in Year After Acquisition Is Included in Unreversed Inclusions Reg. 1.1296-1(a)(3)(iii), Ex. (Video) MTM Election Made in First PFIC Year, Which Was After Acquisition Year Reg. 1.1296-1(c)(7), Ex. 1 (Video) Gain Recognized in... Read more →

23 New Charts - Code §956 Regulation Examples from T.D. 9792

Last month, the IRS released Treasury Decision 9792, which included final regulations under Code §956. The final regulations include rules regarding U.S. property held by controlled foreign corporations ("CFCs") in transactions involving partnerships. There were 23 examples in the regulations, and we have created new situational charts that illustrate all 23 of the examples. The charts are available at http://andrewmitchel.com/topic.php#sec956, where you can find hundreds of other situational charts. Read more →

11 New Charts of Foreign Trust Distributions Through Intermediaries

Treas. Reg. §1.643(h)-1(a)(1) provides that any property transferred to a U.S. person by an intermediary who has received property from a foreign nongrantor trust will be treated as property transferred directly by the foreign nongrantor trust to the U.S. person, if the intermediary received the property pursuant to a plan that had tax avoidance as a principal purpose. A rebuttable presumption of tax avoidance is created if the U.S. person is related to the grantor... Read more →

New Videos - October 2016

Over the last month we have published videos on our YouTube channel Andrew Mitchel Tax discussing several of our situational charts, linked to below. Rev. Rul. 2004-59, Partnership Conversion to Corporation Rev. Rul. 2004-77, Disregarded Entity With Two Owners Rev. Rul. 2004-83, Related Stock Purchase & Liquidation Treated as a D Reorganization Rev. Rul. 2004-85, "F" Reorganization of an S Corp Did Not Terminate Qsub Election for Subsidiary Plantation Patterns - Shareholder/Guarantor Treated as Borrower... Read more →