Subpart F Rules: OBBBA Modifications, New Ownership Determinations, Downward Attribution, Planning Strategies

The Subpart F rules require U.S. shareholders of CFCs to treat certain types of income as taxable in the current year. These calculations have long presented challenges to tax advisers serving clients with CFC holdings. Most recently, OBBBA made significant changes to Subpart F inclusions. Under OBBBA, the income inclusion is pro-rated based on the time period the CFC shareholder held the stock. Prior to OBBBA, a shareholder's income inclusion was determined based on ownership on the last day of the CFC's year. Additional modifications impacting Subpart F inclusions, including the reinstatement of Section 958(b)(4) limiting downward attribution of stock and New 951B anti-deferral rules, were also added by OBBBA.

Continually updated legislation adds complexity to an already challenging regime. Tax advisers must also know whether the new rules create new filing obligations to avoid severe penalties for foreign information reporting noncompliance.

Listen as our authoritative panel of international tax practitioners reviews the Subpart F rules and provides a practical guide to the specific CFC ownership and reporting obligations.

I. Subpart F's CFC Rules

II. OBBBA's modifications to Subpart F

III. Strategies to mitigate the effects of the downward attribution rules

IV. GILTI/NCTI – Code § 951A

V. Tax planning strategies and pitfalls

VI. The high-tax Subpart F and GILTI opt-out elections

VII. Key takeaways

The panel will discuss these and other important topics:

• How OBBBA affects Subpart F income
• Constructive ownership tests in CFCs, including downward attribution rules
• How the Subpart F changes run counter to the tax law's general aim to convert to more territorial taxation of U.S. taxpayers as opposed to global-based taxation
• Treatment of earnings invested in U.S. property

Learning Objectives

After completing this course, you will be able to:

• Determine new ownership inclusion rules after OBBBA
• Distinguish the tax provisions under Subpart F from the GILTI/NCTI provisions
• Identify changes to downward attribution rules made by OBBBA
• Ascertain whether income is Subpart F income and the tax consequences if income is classified as Subpart F income
• Decide the best way to repatriate income and to pay taxes on the repatriation of foreign untaxed earnings

• 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, deferred foreign-source income, earnings and profits, controlled foreign corporations, specified foreign corporations, and repatriation of deferred foreign earnings; familiarity with accumulated cash and non-cash retained earnings and profits and netting of earnings and profits positions

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).