Treasury and IRS Release Final and Proposed Regulations on Downward Attribution under Section 958(b)
Posted on Sep 21, 2020
On September 21, the Department of the Treasury and the Internal Revenue Service released final and proposed regulations addressing the repeal of section 958(b)(4) by the Tax Cuts and Jobs Act (TCJA). Prior to the TJCA, section 958(b)(4) provided that section 318(a)(3) (downward attribution) did not apply to treat a US person as owning stock owned by a person who is a not a US person. The final regulations generally modify provisions of the Code outside of subpart F and are intended to ensure that the provisions operate in a manner consistent with their operation prior to the repeal of...
Continue Reading
Treasury and IRS Release Final BEAT Regulations
Posted on Sep 1, 2020
On September 1, the Department of the Treasury and the Internal Revenue Service released final regulations under section 59A. Section 59A imposes a base erosion and anti-abuse tax (or BEAT), which generally operates as a minimum tax on income without regard to certain deductible payments made to foreign related parties. The final regulations finalize proposed regulations that were issued in December 2019 and generally provide guidance with respect to the determination of a taxpayer’s aggregate group, provide an election to waive deductions in order to avoid triggering BEAT, and detail...
Continue Reading
Treasury and IRS Release Final and Proposed Regulations under Section 245A
Posted on Aug 21, 2020
On August 21, the Department of the Treasury and the Internal Revenue Service released proposed and final regulations under section 245A. Section 245A allows a 100% deduction to a corporate US shareholder for the foreign-source portion of dividends received from a specified 10% owned foreign corporation (SFC). The final regulations limit the deduction for certain dividends received by United States persons from foreign corporations under section 245A and the look-through rule in section 954(c)(6) for certain dividends received by controlled foreign corporations. The proposed regulations...
Continue Reading
OIRA Completes Review of Final and Proposed Regulations under Section 245A
Posted on Aug 11, 2020
On August 7, the Office of Information and Regulatory Affairs (OIRA) completed its review of regulations finalizing temporary regulations issued last June related to the 100% deduction available to a corporate US shareholder for the foreign-source portion of dividends received from a specified 10% owned foreign corporation (SFC) under section 245A and the look-through rule under section 954. OIRA also completed its review of new proposed regulations that would provide coordination rules regarding the anti-abuse rules under sections 245A and 951A, relating to global intangible low-taxed...
Continue Reading
Treasury and IRS Release Final and Proposed Regulations under Section 163(j)
Posted on Jul 28, 2020
On July 28, the Department of the Treasury and the Internal Revenue Service released final and proposed regulations under section 163(j). Amended by the Tax Cuts and Jobs Act (TCJA), section 163(j) generally limits a taxpayer’s interest deduction to the sum of its business interest income, floor plan financing interest, and 30% of its adjusted taxable income. The provision was further amended by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020 to allow taxpayers to deduct up to 50% of their adjusted taxable income (up from 30%), plus interest income and floor plan...
Continue Reading
IRS Issues Final and Proposed Regulations with Respect to the GILTI and Subpart F High-Tax Exclusions
Posted on Jul 20, 2020
On July 20, the IRS released final regulations that allow taxpayers to elect out of the global intangible low-taxed income (GILTI) provisions if the income is subject to a rate of at least 18.9% in a foreign country. Proposed regulations were also released that generally would revise the subpart F high-tax exception to be consistent with the provisions of the GILTI high-tax exception. Read More: Final Regulations Read More: Proposed Regulations
Continue Reading
OIRA Completes Review of Final Regulations on the GILTI High-Tax Exclusion
Posted on Jul 9, 2020
On July 7, the Office of Information and Regulatory Affairs (OIRA) completed its review of final regulations under section 951A relating to the proposed high-tax exclusion for global intangible low-taxed income (GILTI) and its review of proposed regulations under section 954(b)(4) relating to high-tax subpart F income. Among other provisions, the proposed version of the regulations had generally offered taxpayers an election to exclude income from GILTI if the income was subject to a high rate of foreign tax. OIRA began its review of the regulations on June 16th. Read More: GILTI High-Tax...
Continue Reading
IRS Releases Final Regulations under Section 250
Posted on Jul 9, 2020
On July 9, the Internal Revenue Services issued final regulations under section 250. Section 250 provides a deduction for both foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI). The final regulations address the documentation and substantiation requirements with respect to the deduction under section 250. Read More: IRS Releases Final FDII, GILTI Deduction Regulations Read More: Final Regulations Read More: Proposed Regulations
Continue Reading
OMB Begins Review of Final Regulations Regarding the GILTI High-Tax Exclusion
Posted on Jun 17, 2020
On June 16, Treasury submitted final regulations with respect to the proposed high-tax exclusion for global intangible low-taxed income (GILTI) under section 951A, as well as proposed regulations under section 954(b)(4) relating to high-taxed subpart F income, to the Office of Management and Budget (OMB) for review. Among other items, the proposed version of the regulations offered taxpayers an election to exclude income subject to a high rate of foreign tax from GILTI under certain conditions. Read More: GILTI High-Tax Exclusions Regs Reach OIRA Read More: Proposed GILTI...
Continue Reading
OMB Begins Review of Proposed and Final Regulations Under Section 163(j)
Posted on Jun 17, 2020
On June 15, Treasury submitted final and proposed regulations to the Office of Management and Budget (OMB) for review. The IRS had indicated that the modifications to the regulations since OMB’s last review of the package reflect changes made to section 163(j) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Among other provisions, the CARES Act amended section 163(j) to allow taxpayers to deduct up to 50% of their adjusted taxable income (up from 30%), plus interest income and floor plan financing income, for taxable years beginning in either 2019 or 2020. Read More:...
Continue Reading
OIRA Completes Review of Final Regulations under Section 250
Posted on Jun 15, 2020
On June 12, the Office of Information and Regulatory Affairs (OIRA) completed its review of final regulations under section 250. Section 250 generally allows a domestic corporation a deduction for its foreign-derived intangible income (FDII) and its global intangible low-taxed income (GILTI) inclusion. The proposed regulations were published in the Federal Register on March 6, 2019. Read More: Final GILTI and FDII Regs Clear OIRA Review Read More: Proposed Regulations
Continue Reading
IRS Releases Proposed Regulations on Like-Kind Exchanges
Posted on Jun 11, 2020
Today, the IRS released proposed regulations under section 1031, which provides nonrecognition treatment for certain like-kind exchanges of property. The Tax Cuts and Jobs Act (TCJA) limited the application of the provision to exchanges of real property. The proposed regulations would update the existing regulations under section 1031 to take into account the changes made to the section under the TCJA and provide a definition of “real property.” Read More: Proposed Regulations
Continue Reading
OIRA Begins Review of Final Regulations under Section 250
Posted on May 28, 2020
The Office of Information and Regulatory Affairs (OIRA), part of the Office of Management and Budget, has begun its review of final regulations under section 250. Section 250 generally allows a domestic corporation a deduction for its foreign-derived intangible income (FDII) and its global intangible low-taxed income (GILTI) inclusion. The proposed regulations were published in the Federal Register on March 6, 2019. Read More: Final FDII, GILTI Deduction Regs Begin OIRA Review Read More: Proposed Regulations under Section 250
Continue Reading
IRS Issues Guidance on CARES Act changes to Section 163(j)
Posted on Apr 15, 2020
The IRS has issued Rev. Proc. 2020-22 to provide guidance to taxpayers applying the provisions of section 163(j), as amended by the CARES Act. Among other provisions, the CARES Act amended section 163(j) to allow taxpayers to deduct up to 50% of their adjusted taxable income (up from 30%), plus interest income and floor plan financing income, for taxable years beginning in either 2019 or 2020. Rev. Proc. 2020-22 explains how taxpayers may elect to use the prior 30% limitation, rather than the new 50% limitation. Section 163(j) also allows farming and real property businesses to elect out of...
Continue Reading
Treasury and the IRS Release Proposed and Final Regulations under Section 245A(e) and 267A
Posted on Apr 7, 2020
On April 7th, the Department of Treasury and the Internal Revenue Service released final and proposed regulations regarding hybrid arrangements under sections 245A(e) and 267A. Section 245A(e) generally limits the participation exemption deduction under section 245A or causes a dividend received by a controlled foreign corporation (CFC) to be included in subpart F income if a dividend from a CFC is a hybrid dividend, and section 267A generally eliminates deductions for any “disqualified related party amount” paid or accrued through a related hybrid entity or transaction. The final...
Continue Reading