District Court Holds Section 965 Constitutional
Posted on Nov 20, 2020 in International Tax
On November 19, the U.S. District Court for the Western District of Washington held that the transition tax under section 965 was constitutional. Section 965, enacted by the Tax Cuts and Jobs Act, generally imposes a transition tax on a US shareholder’s pro rata share of the accumulated earnings and profits of certain foreign corporations. The court found that the transition tax was a...
Treasury and IRS Release Final BEAT Regulations
Posted on Sep 1, 2020 in International Tax
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...
Treasury and IRS Release Final and Proposed Regulations under Section 163(j)
Posted on Jul 28, 2020 in Uncategorized
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...
IRS Issues Final and Proposed Regulations with Respect to the GILTI and Subpart F High-Tax Exclusions
Posted on Jul 20, 2020 in International Tax
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....
IRS Releases Final Regulations under Section 250
Posted on Jul 9, 2020 in International Tax
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...
OMB Begins Review of Final Regulations Regarding the GILTI High-Tax Exclusion
Posted on Jun 17, 2020 in International Tax, Uncategorized
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...
OMB Begins Review of Proposed and Final Regulations Under Section 163(j)
Posted on Jun 17, 2020 in Uncategorized
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...
OIRA Completes Review of Final Regulations under Section 250
Posted on Jun 15, 2020 in International Tax
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....
IRS Releases Proposed Regulations on Like-Kind Exchanges
Posted on Jun 11, 2020 in Uncategorized
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...
OIRA Begins Review of Final Regulations under Section 250
Posted on May 28, 2020 in International Tax
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...
IRS Issues Guidance on CARES Act changes to Section 163(j)
Posted on Apr 15, 2020 in Uncategorized
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...
Treasury and the IRS Release Proposed and Final Regulations under Section 245A(e) and 267A
Posted on Apr 7, 2020 in International Tax
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...
CARES Act Amends TCJA Provisions
Posted on Mar 30, 2020 in Uncategorized
On March 27, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. While the Act is primarily focused on the coronavirus epidemic, the Act made a few significant changes to provisions enacted by the Tax Cuts and Jobs Act (TCJA). The Act: • Allows net operating losses (NOLs) arising in 2018, 2019, or 2020 to be carried back five years and exempts NOLs from the...
OMB Completes its Review of Proposed Regulations under Section 163(j)
Posted on Mar 24, 2020 in Uncategorized
The Office of Management and Budget (OMB) has completed its review of proposed regulations under section 163(j). 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 IRS had previously stated that the proposed section 163(j) regulations would likely be...
OIRA Completes Its Review of Final 163(j) Regulations
Posted on Feb 5, 2020 in Uncategorized
On January 31, the Office of Management and Budget (OMB) completed its review of final regulations under section 163(j). 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 IRS had previously stated that the final regulations would likely be released along...