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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

    Thursday, May 8, 2025

  • 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 walk international tax practitioners through allocating and apportioning foreign tax credit expenses. Our panel of astute foreign tax advisers will provide illustrative examples of these complex calculations for practitioners working with international taxpayers subject to U.S. tax.

Faculty

Andre Benayoun
Managing Director
CBIZ

Mr. Benayoun is a Managing Director who specializes in consulting around international taxation for inbound and outbound multinational corporations, S corporations, partnerships, and individuals and families. He has more than 10 years of business consulting experience in international taxation with Big Four firms. Mr. Benayoun's experience includes consulting around international tax reform issues from the Tax Cuts and Jobs Act as well as structuring mergers and acquisitions as well as liquidations. He has worked extensively with clients on repatriation planning; foreign-derived intangible income (FDII) planning; treaty analysis; and foreign currency issues; and U.S. CFC and anti-deferral regimes, such as Subpart F/§956/GILTI. Mr. Benayoun is well versed tax provision work (FIN 48/FAS 109), OFL/ODL analysis, debt vs. equity analysis, FTC limitation analysis and planning, tax efficient debt financing, Permanent Establishment (“PE”) risk assessment, entity rationalization planning, and inbound work including ECI, FDAP income, withholding, treaty analysis (e.g., LOB Article, PE Article, etc.), and branch profits tax issues.

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Ryan Dudley
Managing Director
CBIZ

Mr. Dudley, is a Managing Director in the Firm’s International Tax group, specializes in developing cross-border commercial structures and financing strategies to optimize international operations and transactions. With over 25 years of public accounting and investment advisory experience, his clients have ranged from Fortune 50 multinational corporations to private equity and hedge funds, small businesses, and start-ups. Mr. Dudley has advised clients in industries as diverse as banking and finance, technology, real estate, infrastructure, manufacturing, and pharmaceuticals.

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Description

The foreign tax credit is a lucrative credit that provides relief from double taxation of foreign income. The Section 904 limitation employs a ratio of foreign source taxable income to worldwide taxable income to ensure U.S. taxpayers utilize the credit only to the extent of their foreign source income. Taxpayers with excess credits may want to increase their foreign source income to maximize their foreign tax credits. To do this, expenses allocated and apportioned would need to be minimized.

Allocating and apportioning expenses is an arduous process. In order to calculate the credit, expenses must be spread among classes of gross income. Specific classes of income include, for example, compensation for services, gross business income, interest, and rents. First, expenses are allocated to a class of income when the deduction is "definitely related." To be definitely related, an expense must be incurred (1) as a result of or incident to an activity or (2) in connection with property from which the class of income is or could be derived. Deductions can be definitely related even if there is no income in a particular class during the taxable year.

Expenses that are not definitely related to a class of gross income must be divided into statutory and residual groupings. The taxpayer can choose an appropriate method to apportion expenses; however, the preferred method must represent a factual relationship between the expense and the relative income.

To further complicate the calculation, there are also specific rules for allocating and apportioning certain expenses including interest, R&E, and state taxes. International tax practitioners need to understand the nuances of the foreign tax credit calculation and the Section 904 limitation to maximize this valuable credit.

Listen as our panel of international tax experts breaks down the complexities of allocating and apportioning foreign tax credit expenses and offers tips to extract the maximum credit and minimize tax for multinational taxpayers.

Outline

  1. Foreign tax credit limitations and rules
  2. Section 904 limitation
  3. Classes of income
  4. Allocating expenses
  5. Apportioning expenses
  6. Special categories of expenses
  7. Examples

Benefits

The panel will cover these and other critical issues:

  • Calculating the Section 904 limitation on foreign tax credits
  • Determining which expenses are definitely related to specific categories of income
  • Dividing expenses into statutory and residual groups
  • Selecting an appropriate apportionment method
  • Allocating and apportioning R&E, interest, state taxes, and other specific deductions

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify classes of gross income
  • Determine how to apportion expenses to statutory and residual income groupings
  • Decide how interest, R&E, state taxes, and other specific expenses are allocated and apportioned
  • Ascertain appropriate allocation methods for apportioning expenses

  • 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).