Taxation of U.S. Persons Owning Foreign Corporations: Strategies for Subpart F and GILTI Inclusions

The GILTI provisions and expanded Subpart F rules significantly impact U.S. owners of foreign corporations. Tax professionals must recognize implications and potential opportunities for U.S. persons owning foreign corporations under recent IRS guidance and current tax law.

The Subpart F rules require "U.S. shareholders" of CFCs to treat certain income types as taxable in the current year. Section 250 adds a layer of current income inclusion for CFC shareholders on global "intangible income" and provides a deduction that reduces the effective tax rate on the included income.

The repeal of Code Sec. 958(b)(4) forces certain taxpayers to include in gross income amounts under Subpart F and GILTI attributable to foreign corporations that are CFCs, even though they may have limited access to critical items to determine whether such foreign corporations are CFCs and their inclusion amounts.

Rev Proc 2019-40 provides relief to certain U.S. persons who own stock in certain foreign corporations by limiting the inquiries they must make to determine whether certain foreign corporations are CFCs. It also offers particular unrelated minority U.S. shareholders the ability to rely on limited information to calculate Subpart F and GILTI inclusions without detailed financial statement information.

Listen as our authoritative panel of international tax practitioners reviews the Subpart F rules and GILTI provisions and provides a practical guide to determining CFC ownership and reporting obligations for U.S. persons owning foreign corporations.

I. Treatment of U.S. persons owning foreign corporations

II. IRS guidance and key takeaways

III. U.S. tax challenges under Subpart F

IV. U.S. tax challenges under GILTI

V. Best practices for ensuring accurate reporting and compliance

The panel will review these and other key issues:

• Key tax compliance challenges for U.S. persons owning foreign corporations
• Recent IRS regulations and guidance for U.S. taxpayers
• Expanded definition of a CFC and U.S. shareholder
• Expansion of Subpart F and key challenges under new tax law
• Challenges under Section 951A GILTI rules for U.S. taxpayers
• Tax planning and methods to ensure accurate reporting and compliance

Learning Objectives

After completing this course, you will be able to:

• Determine how the definition of U.S. shareholders subject to tax on previously deferred foreign-source income has changed under the new law
• Distinguish the tax provisions under Subpart F from the GILTI provisions
• Ascertain whether income is Subpart F income and the tax consequences of classifying income as Subpart F

• 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 professional experience at mid-level within the organization, preparing complex tax forms and schedules. Specific knowledge and understanding of international taxation, foreign source income, deferred foreign source income, controlled foreign corporations, specified foreign corporations, repatriation of deferred foreign earnings, and treatment of foreign-sourced income received by U.S. taxpayers, familiarity with cash and non-cash retained earnings and profits and global intangible low-tax income (GILTI).

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).