Foreign Entity Selection for U.S. Owners of Offshore Businesses: Avoiding Tax and Reporting Traps
Applying U.S. Law to Foreign Structures, Determining Whether Foreign Trust Qualifies for U.S. Treatment, Entity Treatment
About the Course
Introduction
This course will provide tax advisers to individuals owning controlling shares in foreign businesses with a practical guide to the tax and operational impacts of selecting the entity form for those foreign entities. The panel will discuss the full range of short-term and long-term tax issues that arise in foreign entity selection, with a specific focus on the changes the One Big Beautiful Bill Act made on U.S. tax consequences in selecting the appropriate entity form for purposes of U.S. tax treatment of offshore holdings.
Description
A frequently overlooked but potentially costly task for tax advisers to U.S. individuals holding foreign business interests is determining how those foreign organizations are classified for U.S. tax purposes. U.S. tax advisers must recognize that the IRC, not the situs country's laws, determines how to classify a U.S. taxpayer's foreign business holding.
In identifying the proper tax classification of a foreign business holding, advisers first must determine whether the business organization qualifies as a taxable entity separate from its owner(s), and if so, whether the entity is appropriately considered a trust or a business organization under U.S. tax law. Treasury regulations define trusts as an arrangement requiring trustees to take title to a property to preserve property for beneficiaries, rather than as a joint business enterprise for profit. The Service may recast a trust if the entity's purpose does not exist to protect property for beneficiaries.
Once the analysis determines that a foreign structure qualifies as a business entity rather than a trust, the U.S. owner must identify the tax classification of the entity. In certain circumstances, U.S. owners may elect default classifications to choose how to classify the entity for U.S. tax purposes. Tax advisers must know the mechanics, as well as the ramifications, of entity elections on the tax and reporting duties of U.S. owners.
Listen as our expert panel provides a thorough and practical guide to the tax and operational impacts of entity classification of foreign interests owned by U.S. taxpayers.
Presented By
Mr. Fusco is Principal at EY Private, International Private Client Services.
Mr. Little is an International Tax Partner at Aprio who helps U.S. and multinational companies address complex inbound and outbound international tax issues, providing practical, value-driven guidance to middle-market clients. He has over 20 years of experience in international tax, serving private and public companies across manufacturing, software, private equity, and specialty finance. Mr. Little focuses on cross-border M&A, U.S. tax reporting for foreign operations, tax treaties, and international structuring. Most recently, Mr. Little was an international tax principal at BDO, where he led various business development efforts, built client relationships, and collaborated across service lines. He has also worked at two Big 4 firms. Mr. Little is a frequent speaker at training events and industry conferences and has been published in The Tax Adviser.
Mr. Tohni's responsibilities include compliance and provision reporting of Expedia Group's international operations, such as US tax return compliance, foreign tax credits, foreign-derived intangible income ("FDII"), deemed income inclusions, repatriations, indefinite reinvestment, and deferred tax assets/liabilities related to these items.
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BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
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BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
Date + Time
- event
Monday, October 26, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. IRS rules detailing jurisdiction over classification of foreign business organizations owned by a U.S. taxpayer
II. Determining if a foreign business organization or activity qualifies as a taxable entity separate from its U.S. owner
III. Treas. Reg. 301.7701-4(a)-(c) trust definitions and rules
IV. Tax treatment of foreign business entities
V. Available elections
The panel will discuss these and other relevant topics:
- Applying fact analysis to determine whether to classify a foreign situs trust as a trust for U.S. tax purposes or risk recharacterization as a taxable business entity
- Identify when a foreign entity becomes "relevant" and thus subject to U.S. tax or informational reporting requirements
- How treatment of the foreign entity in its home country can complicate the decision on entity selection/classification
- Available elections to determine favorable U.S. tax classification of foreign business entities
Learning Objectives
After completing this course, you will be able to:
- Discern the rules for determining whether a foreign business association qualifies as a separate taxable entity under U.S. tax law
- Determine default classification rules for entities
- Identify elements of a foreign trust that would make it ineligible for trust treatment under U.S. tax law
- Recognize the available elections for U.S. owners of foreign business entities to select how those interests will be taxed by the United States
- 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 at mid-level within the organization, supervising other preparers/accountants, preparing complex corporate tax forms and schedules. Specific knowledge of rules governing corporate entity structuring, and federal income tax treatment of business entities. Familiarity with Subpart F rules and concepts of cross-border tax arbitrage and hybrid entities.
BARBRI, 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.
BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
BARBRI CE webinars-powered by Barbri-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .
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