Tax Reform and U.S. Foreign Reporting for Individuals: New Cross-Border Repatriation and Inclusion Provisions

The recent tax overhaul Act represents the most sweeping set of changes to the U.S. income tax code in over 30 years. In particular, the law sets a new framework for the treatment of foreign-sourced income received by U.S taxpayers. While the focus of the new international regime is on corporations, the law contains numerous provisions which will have dramatic impact on U.S. individuals engaged in foreign business activities.

The new law adopts a territorial tax regime system for corporations but puts several mechanisms in place to end prior deferral benefits for U.S. shareholders of foreign business entities. The Act offers reduced rates on repatriation of income but also significantly expands the base of transnational cross-border income that will be subject to current U.S. taxation. The provisions are applicable immediately, with some limited transition relief.

The new law applies to “U.S. shareholders” of “specified foreign corporations” (SFCs), which includes all foreign entities qualifying as CFCs. For purposes of the new foreign tax regime, U.S. shareholder includes any U.S. domestic corporation, partnership, trust, estate or individual that directly, indirectly or constructively owns 10% or more of an SFC’s value or voting power.

Because the new system begins immediately, tax advisers serving individual and small business clients with foreign-source income must avoid costly tax consequences by becoming proficient in the new concepts.

Listen as our experienced panel provides a critical first look at the cross-border implications of the tax reform law.

1. New cross-border provisions and definitions in 2017 tax overhaul bill
2. U.S. shareholders subject to new foreign provisions
3. Territorial regime for foreign-sourced qualified dividends
   1. Inclusion in 2017 income of pro rata share of accumulated deferred foreign income of corporation
   2. Participation exemption system
   3. GILTI and inclusion of passive foreign income
4. Treatment of foreign intangibles

The panel will discuss these and other important topics:

• How the definitions of U.S. shareholders subject to tax on previously deferred foreign-source income have changed under the new law
• Critical income inclusion and repatriation provisions effective in 2018
• Treatment of foreign passive and intangible income under the new rules
• GILTI and application of Subpart F
• Treatment of foreign tax credits going forward

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 have changed under the new law.

• Identify the repatriation provisions effective in 2018.

• Distinguish the tax provisions under subpart F from the GILTI provisions.

• Recognize the treatment of foreign tax credits starting in 2018.

• Establish the impact that the ending of prior deferral benefits for U.S. shareholders of foreign business entities has on taxpayers beginning in 2018.

• 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, preparing complex tax forms and schedule and/or supervising other preparer/accountants. Specific knowledge for the treatment of foreign-sourced income received by U.S. taxpayers, corporate taxation, income repatriation, controlled foreign corporations and specified foreign corporations, familiarity with deferral benefits for U.S. shareholder of foreign business entities (prior to the new law) and cross-border income subject to taxation.

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).