Check-the-Box Elections for Foreign Subsidiaries: Achieving Optimal Tax Treatment Through Entity Selection

Using Hybrid Entities for Tax Arbitrage, Structuring Entities to Enable Deferral of Foreign Profits, Planning Tips Post Tax Reform

A live 110-minute CPE webinar with interactive Q&A


Wednesday, May 30, 2018

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

(Alert: Event date has changed from 4/26/2018!)

Early Registration Discount Deadline, Friday, May 4, 2018

or call 1-800-926-7926

This webinar will provide tax advisers with thorough and practical guidance on the advantages and pitfalls of utilizing the “check-the-box” election for foreign subsidiaries. The panel will discuss the various tax effects of specific elections, outline the tax timing and tax treatment, and explain repatriation and tax reform implications of income from foreign subsidiaries.

Description

The Section 7701 “check-the-box” provisions for entity selection are one of the most potent tax planning tools available to U.S. taxpayers conducting operations outside the U.S. For taxpayers with foreign activities, the ability to create an entity structure to minimize or defer taxes has been an integral component of cross-border tax strategies. While the regulations provide flexibility for U.S. taxpayers engaging in foreign business, tax advisers must know the practical aspects of the rules and the impact of tax reform to maximize the tax benefits.

Section 7701 provides default classification rules for eligible entities but allows the entity to determine how it is classified for U.S. tax purposes. A foreign entity subject to U.S. tax must make its initial election when it becomes “relevant,” i.e., when it impacts the U.S. tax liability of any person for either payment or informational return purposes.

The ability of U.S. multinationals to engage in cross-border tax arbitrage through the creation of “hybrid entities” is one of the most significant benefits under check-the-box rules. Hybrid entities are treated one way in a foreign jurisdiction and another by the U.S. By managing the entity status of various foreign holdings, U.S. multinationals can achieve significant tax advantages.

Listen as our experienced panel provides thorough and practical guidance to the check-the-box regulations of Section 7701.

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Outline

  1. Purpose of “check-the-box” entity election
  2. Relevance determination for foreign entities
  3. Hybrid entities and tax planning opportunities
  4. Income transfer opportunities Subpart F post-tax reform
  5. Planning tax analysis for initial entity selection
  6. Making retroactive entity selection or reevaluation
  7. Impact of tax reform and tax planning tips

Benefits

The panel will discuss these and other important issues:

  • How do check-the-box elections facilitate the creation of “hybrid” entities?
  • Utilizing check-the-box elections to structure transactions to pull foreign-source income out of Subpart F treatment
  • Retroactive entity selection and completing Form 8832
  • How to determine whether a foreign entity is “relevant” for U.S. taxation purposes
  • The impact of tax reform on check-the-box elections and tactics to maximize tax savings

Faculty

Fuller, Pamela
Pamela A. Fuller, JD, LLM

Of Counsel
Tully Rinckey

Ms. Fuller has broad experience in federal, state, and international tax planning matters. She counsels foreign and...  |  Read More

Henson, William
William Henson

Partner
Plante Moran

Mr. Henson has more than 23 years of experience working in both public accounting and industry. He specializes in...  |  Read More

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