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Foreign Tax Technical Update- Section 956

PROPOSED REGULATIONS REDUCING THE AMOUNT DETERMINED UNDER SECTION 956 WITH RESPECT TO CERTAIN DOMESTIC CORPORATIONS ISSUED

Summary

On October 31, the Department of the Treasury and the Internal Revenue Service (collectively, Treasury) issued proposed regulations under Section 956, Investment of earnings in United States property, (the Proposed Regulations). The Proposed Regulations reduce the amount determined under Section 956 with respect to certain domestic corporations that own (or are treated as owning) stock in foreign corporations. Read more

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Own a CFC? Get Ready to be GILTI…

There have been many changes in the last 12 months for US taxation of foreign entities. US shareholders of controlled foreign corporations (CFCs) have already felt the pinch of transition tax for 2017. Unfortunately, the pinch of foreign taxation changes is going to continue in 2018 and onwards thanks in part to GILTI. As the acronyms connotation implies, it is a less than popular tax change. Let us look together at some significant points related to the ominous GILTI: Read more

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Fa La La Falling Afoul of Foreign Gift Rules…

Foreign Gift

If you plan to do any international gifting or donating this year, make sure you are aware of possible tax consequences that may be associated.

By Bethany Bouw, CPA

Tis the season when those far and wide give gifts to their loved ones and charities. While you may be giving purely for the benefit of others, this does not remove the need to be aware of IRS requirements and regulations. Though the recipients will appreciate your altruistic intent, the IRS still has expectations no matter the spirit of the season. So, lest you fall afoul of the reporting rules, here are three commonly asked questions to consider as you gift and donate internationally this holiday season. Read more

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So You Think You Want to Expatriate…

Expatriate

Anyone thinking about expatriating needs to be aware of the associated tax and legal responsibilities.

By Bethany Bouw, CPA

We see much in the news about people expatriating – jokes related to a political climate (regardless of administration), trying to avoid tax (think that Facebook co-founder who renounced citizenship), and those who have spent the majority of their lives abroad, etc. Unfortunately, relinquishing citizenship and ending long-term residency is not as easy as mailing in your passport or green card and booking a flight with your belongings. There is much more involved from a tax perspective when expatriating and it should be done with input from an attorney and a qualified tax professional. Below you will find 10 starting questions and answers regarding expatriation and Form 8854, Initial and Annual Expatriation Statement. Read more

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Foreign Currency: What Does The IRS Say About It?

Foreign CurrencyBy Bethany Bouw, CPA

More now than ever people travel, work, and live all around the world. Therefore, understanding how to deal with foreign currency is becoming even more relevant. Taxpayers who have transactions in foreign currencies often wonder what they need to report and how they get the foreign currency into US dollars. Let’s review four of the most widely asked question regarding a taxpayer’s responsibility when dealing with foreign currency. Read more

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Foreign Taxation Technical Update: Section 965 Guidance

Summary

On October 1, the Department of the Treasury and the Internal Revenue Service (collectively, Treasury) issued Notice 2018-78 (the Notice). The Notice provides guidance with respect to the basis election under Prop. Reg. §1.965-2(f)(2), the application of rules for disregarding certain assets for determining aggregate foreign cash position in Prop. Reg. §1.965-3(b) to consolidated groups and relief in connection with Hurricane Florence. Read more

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International Tax Technical Update- October

TREASURY ISSUES PROPOSED REGULATIONS FOR GLOBAL INTANGIBLE LOW-TAXED INCOME, SECTION 951A

Summary

On September 13, Department of the Treasury and the Internal Revenue Service (collectively, Treasury) issued proposed regulations (REG-104390-18, hereinafter, the Proposed Regulations) implementing Section 951A. Read more

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Foreign Entity Filings- Forms 8865 and 8858

8865 and 8858

U.S. taxpayers who do business globally are well aware of the tax implications involved. Forms 8865 and 8858 are lesser known, but important for foreign corporations to understand.

By Bethany Bouw, CPA

Taxpayers who have foreign businesses are often surprised to hear there are filing requirements to disclose their business. If you are familiar with the basics of international business, you may know this is true of foreign corporations. The same is true of partnerships, sole proprietors, other foreign disregarded entities and more. In many cases, taxpayers assume that if they keep most aspects of their business abroad, that the IRS will have no interest in them. Unfortunately, they are incorrect.

Read more

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The GILTI Effect: Tax Reform And Global Intangible Low-Taxed Income

What is GILTI?
The Global Intangible Low-taxed Income (GILTI) is a new provision, enacted as a part of tax reform legislation. Mechanically, it functions as a global minimum tax and introduces a lot of issues for all U.S. shareholders of controlled foreign corporations (CFCs) – especially individuals and partnerships. Read more

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Do You Need to Renew Your ITINs?

ITIN

If you have an Individual Taxpayer Identification Number (ITIN), it may need to be renewed before the end of the year.

By Bethany Bouw

As we head into the tail-end of summer, it is good to take a moment to pause and consider if you need to renew your ITIN before the end of the year. The last thing anyone wants is to find out that their ITIN is expiring and there is no time left to renew. In accordance with the Protecting American’s from Tax Hikes Act of 2015 (the PATH Act), ITINs that have not been used on a federal return at least once in the last three years will expire on December 31, 2018. Additionally, ITINS bearing specific middle digits are also due to expire on the same date. The IRS is encouraging taxpayers to renew their ITINS as soon as possible to avoid delayed tax refunds and return processing. Read more