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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Friday, May 31, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This webinar will discuss the sourcing rules under IRC Section 861 and provide examples of applying these to income classes, allocating and apportioning expenses, and determining the availability of the foreign tax credit. Our panel of foreign tax veterans will provide scenarios that walk international tax practitioners through these complex calculations.

Faculty

Surbhi Bordia
Partner
Armanino, LLP

Ms. Bordia has over 10 years of public accounting experience. She addresses complex tax issues that impact international companies’ operations and puts tax efficient structures in place for her clients. Ms. Bordia’s hands-on experience in international tax, IP migration planning and legal entity rationalizations make her an expert consultant and key team player for clients in mergers and acquisitions. Ms. Bordia’s focus areas include GILTI, BEAT, FDII, anti-hybrid rules, foreign tax credits, subpart F, withholding tax, investments in U.S. property, FX gains and losses, treaty-related issues, outbound transfers and permanent establishment and profit attribution rules.

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Kodj Gbegnon
Principal
PwC

Mr. Gbegnon is a partner in the International Tax Services practice at PwC’s Silicon Valley office (San Jose).  His practice focuses on tax planning for cross-border M&A and restructurings, IP integration, taxation of online / digital transactions and tax attribute planning (including foreign tax credits). Mr. Gbegnon is a member of the California Bar Association. 

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Nick Zemil
Director
PwC

Mr. Zemil focuses his practice on assisting taxpayers with large-scale international tax issues, with an emphasis on outbound transactions. Prior to joining PwC's Washington National Tax Services group, he was an associate at an international law firm where his practice focused on cross-border tax controversy issues ranging from the audit stage through litigation. While attending the University of Virginia School of Law, Mr. Zemil was on the editorial board of and was a contributor to the Virginia Tax Review.

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Description

Section 861(a) governs sourcing of gross income within and outside the United States. Not only does sourcing affect the U.S. federal income consequences for foreigners, it is also used to calculate the availability of the foreign tax credit. The type of income, whether interest, dividends, rents, proceeds from the disposition of real property, etc., influences the tax consequences.

Section 861(b) defines how taxable income is determined by allocating and apportioning expenses, losses, and other deductions to various classes of gross income. The resulting income is used to calculate the foreign tax credit limitation and CFC Subpart F-tested income. The steps for allocating and apportioning interest, research and development expenses, income tax, and stewardship expenses are complicated but must be understood by international tax professionals.

Listen as our panel of international tax experts dives into the complexities of IRC Section 861 and its application to sourcing U.S. income.

Outline

  1. U.S. sourced income under Section 861: introduction
  2. Foreign tax credits
  3. Sourcing rules
    1. Interest and dividends
    2. Personal services
    3. Rents and royalties
    4. Real property proceeds
    5. Overlap rules
  4. Allocation and apportionment of expenses
    1. Interest
    2. Research and development
    3. Income tax
    4. Stewardship
  5. Examples

Benefits

The panel will review these and other critical issues:

  • Sourcing interest and dividend income under Section 861(a)
  • The difference between allocating and apportioning expenses under IRC Section 861(b)
  • Specific examples of the application of the Section 861 guidelines to the calculation of the available foreign tax credit
  • Categorizing CFC income under Section 861

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Determine how sourcing rules in Section 861 impact the taxation of interest received by foreign persons
  • Decide how to allocate and apportion expenses under Section 861(b)
  • Ascertain the impact of interest expense on the foreign tax credit
  • Identify classes of income that are covered under the Section 861(a) sourcing rules

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).