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

Recording of a 110-minute CPE webinar with Q&A

Conducted on Tuesday, June 19, 2018

Recorded event now available

or call 1-800-926-7926
Course Materials

This course 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 other implications of income from foreign subsidiaries under the new law.


Tax law changes at the end of 2017 resulted in significant changes to the decision-making process in choosing the form of an entity in a cross-border structure. While the Section 7701 “check-the-box” provisions for entity selection remain one of the most potent tax planning tools available to U.S. taxpayers conducting operations outside the U.S., the treatment of those entities, and their U.S. owners, may be significantly different than in the past. 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. The regulations provide flexibility for U.S. taxpayers engaging in foreign business, but tax advisers must know the practical aspects of the rules and the impact of the 2017 tax law changes 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.

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



  1. Overview of the Tax Stakes
  2. Basic Entity Classification Rules of U.S.
  3. § 962 election by an individual
  4. Overview of Subpart F rules
  5. GILTI Regime
  6. Distributions and Sales of CFC Stock
  7. Review of provisions related to US "Territorial Regime"


The panel will discuss these and other important issues:

  • The implications of using check-the-box elections 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 law changes on check-the-box elections and tactics to maximize tax savings


Fuller, Pamela
Pamela A. Fuller, JD, LLM

Of Counsel
Royse Law Firm

Ms. Fuller advises a wide range of clients--including private and public companies, joint ventures, private equity...  |  Read More

Henson, William
William Henson

Plante Moran

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

Hutchens, Jon
Jon T. Hutchens


Mr. Hutchens is a member of Dentons' Tax practice, and provides advice on both tax and derivatives matters in a...  |  Read More

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