Check-the-Box Elections for Foreign Subsidiaries and Branches: Achieving Optimal Tax Treatment Through Entity Selection
Using Hybrid Entities for Tax Arbitrage, Structuring Entities to Enable Deferral of Foreign Profits, Planning Tips
Recording of a 110-minute CPE webinar with Q&A
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 treatment, and explain repatriation and other implications of income from foreign subsidiaries under the new law.
Outline
- Overview of the U.S. tax stakes for foreign entity selection
- Basic entity classification rules of U.S.
- Identifying when a de facto entity has been formed for U.S. tax purposes (state law not controlling)
- When entity selection becomes “relevant”
- Domestic and foreign “default entity classification” rules
- Expansion of Subpart F’s CFC Rules; downward attribution rules and recent regulations
- Section 962 election by an individual
- GILTI regime and the Final GILTI high-tax exclusion regulations
- Other Considerations and Tax Strategies relevant to foreign entity selection
- Planning into Subpart F to avoid GILTI
- Check-and-Sell Transactions
- CTB to flow-through to combine QBAI or avoid Code § 59A BEAT
- Final Foreign Branch Tax Credit Limitation Basket (brief overview)
- Final Anti-Hybrid Regulations recently issued under Code § 267A (brief overview)
- Disposition of partnership interests by foreign partners under Code § 864(c)(8)
- Preparing IRS Form 8832, and Late Elections (§ 9100 Relief)
- Key Take-Aways
Benefits
The panel will discuss these and other vital issues:
- The implications of using check-the-box elections to pull foreign-source income out of Subpart F treatment
- The effect of the new final foreign tax credit regulations on entity selection
- 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
Faculty
Pamela A. Fuller, Esq., J.D., LL.M. (Taxation)
Senior Counsel (Tax, M&A, International)
Tully Rinckey PLLC and Zahn Law Group
Ms. Fuller’s practice has a triple focus: tax planning, tax controversies, and tax compliance. She advises a wide... | Read More
Ms. Fuller’s practice has a triple focus: tax planning, tax controversies, and tax compliance. She advises a wide range of clients–including private and public companies, joint ventures, funds, high-net-worth individuals, C-Suite executives, and government entities–on transactional, investment, and supply-chain strategies to achieve optimal tax and business results. Ms. Fuller advises clients on both purely domestic transactions and transnational ones, helping both U.S.-based companies and foreign companies (and their executives) achieve the best possible results from a tax and business perspective. Ms. Fuller is Chair of the ABA’s Tax Section’s Tax Policy Committee, and also Co-Chair of the International Tax Committee of the ABA’s worldwide International Law Section. She frequently speaks at law conferences, and publishes papers on international tax topics in peer-reviewed law journals.
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Ronald Kalungi, JD, LLM
Director of International Tax
Drucker & Scaccetti
Mr. Kalungi provides tax planning, tax compliance and business consulting services to a broad base of clients including... | Read More
Mr. Kalungi provides tax planning, tax compliance and business consulting services to a broad base of clients including multinational corporations, partnerships, S Corporations, and high-net-worth individuals.
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