Disposing of a Foreign Disregarded Entity: Tax Challenges and Reporting Requirements
Recording of a 110-minute CPE webinar with Q&A
This course will identify specific tax issues surrounding the sale of a foreign entity. Our panel of foreign tax veterans will explain steps that taxpayers can take to lessen the taxes paid when selling stock or assets held overseas, including critical elections. The panel will also review required, but sometimes overlooked, U.S. information reporting obligations.
Outline
- Dispositions of a foreign disregarded entity
- Specific tax considerations by entity type
- Income tax considerations
- Section 1060 asset sales
- Section 469 passive loss limitations
- Foreign tax Credit Limitations
- Examples
Benefits
The panel will review these and other critical issues:
- The manner in which the following tax items are determined:
- The character of the gain arising from the sale transaction, as either long-term capital gain or ordinary income,
- The manner of bifurcating the gain between those two categories,
- The tax rate applicable to each type of income category, and
- The source of the resulting long-term capital gain and ordinary income for purposes of applying the foreign tax credit provisions of U.S. tax law for income taxes paid to Spain in connection with the transaction.
- The extent to which Mr. A may deduct the deferred losses from the Resort V business that have been reported on U.S. Federal income tax returns filed for each year in which Resort V was owned against the gain arising from the sale of the shares of S Co in view of the limitations imposed by the Passive Activity Loss rules under Code §469.
- The extent to which Mr. A may deduct the deferred losses from the Resort V business that have been reported on U.S. Federal income tax returns filed for each year in which Resort V was owned against the gain arising from the sale of shares of S Co in view of the limitations imposed by the foreign tax credit rules under Code §904 and its regulations.
Faculty
Stanley C. Ruchelman
Chairman
Ruchelman
Mr. Ruchelman concentrates his practice in the area of tax planning for transactional business operations, with... | Read More
Mr. Ruchelman concentrates his practice in the area of tax planning for transactional business operations, with emphasis on intercompany transactions. He represents companies in matters involving the I.R.S. and counsels corporate clients on transfer pricing issues and worldwide reorganizations. He advises foreign private clients on structuring investments in the United States. He authors and speaks on international taxation. Previously, he was an international tax partner at a major international accounting firm and was a senior attorney in the Legislation & Regulations Division of the Office of Chief Counsel, Internal Revenue Service, where he participated in the negotiation of income tax treaties and the development of legislative and regulatory policy affecting international business.
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Neha Rastogi
Attorney
Ruchelman
Ms. Rastogi is known for her thorough and professional approach to international tax matters. At Ruchelman, she... | Read More
Ms. Rastogi is known for her thorough and professional approach to international tax matters. At Ruchelman, she regularly advises domestic and foreign clients on tax-efficient structuring. Her cross-border practice is informed by her diverse experience in the tax environment. Before joining the firm, she qualified as an advocate and a member of the Institute of Chartered Accountants of India and worked at a leading tax law firm based in New Delhi. There she focused on planning and controversy matters, advising on the corporate income tax implications of activities in India as well as personal income tax and related compliance obligations.
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