Description

This course is a case study designed to provide a comprehensive overview of U.S. taxation of a foreign corporation. Using a specific example, the course will walk through step-by-step mechanics on how to calculate the income inclusions and foreign tax credits under tested income (formerly known as global intangible low-taxed income or GILTI), Subpart F, and passive foreign investment company (PFIC) regimes. These computations have been updated to reflect changes enacted by the One Big Beautiful Bill Act (OBBBA). The case study will further evaluate the tax impact of subsequent distributions from the foreign corporation and sales of its stock. A compare-and-contrast approach will highlight the different outcomes of these regimes for individuals and for C corporations, empowering participants to advise their clients on the most tax-efficient way to structure their foreign investments.

Instructor: Renata Maroney (Stasaityte), CPA

Target Audience

Any tax practitioner with clients invested in a foreign corporation

Course Objectives

Explain the similarities and differences between tested income, Subpart F, and PFIC regimes

Understand the mechanics of income inclusions and foreign tax credits available under tested income, Subpart F, and PFIC regimes

Compare and contrast the overall tax liability under different circumstances

Identify tax-planning opportunities for income from foreign corporations

Subjects

Understand how to approach and analyze the U.S. taxation of foreign corporations

Using an example, calculate tested income, Subpart F, and PFIC income inclusions for an individual and C corporation

Determine how much foreign tax credit can be claimed against such income inclusions

Determine how subsequent dividend distributions from the foreign corporation are taxed

Calculate capital gain on the disposition of the foreign corporation

Compare different outcomes and discuss the impact of Section 962 election

Identify basic strategies for managing tax liabilities related to foreign corporations

Prerequisites

A basic understanding of the tax rules relating to individual and corporate income tax