FDII Deduction and GILTI Rules: Claiming Section 250 Tax Incentives on Eligible Foreign Income

QBAI, Expense Allocations, Sale of Property Provisions, Deduction-Eligible Income, FDDEI Transactions, Ordering Rules

Note: CLE credit is not offered on this program

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


Conducted on Tuesday, December 10, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide corporate tax advisers with a practical guide to the tax planning opportunities and challenges of the Section 250 FDII deduction in light of recent IRS guidance. The panel will discuss how the recently proposed regulations impact the treatment of certain transactions for purposes of calculating deduction-eligible income and offer suggestions on tax-efficient structures to take advantage of tax savings built into the FDII deduction.

Description

Recently issued proposed regulations on Section 250 FDII deductions provide both opportunities and additional challenges in multinational tax planning for U.S. corporations with offshore operations. The deduction, which may tax qualifying income at an effective rate of 13.125% (after certain adjustments and limitations), in conjunction with the GILTI inclusion of Section 951A, to provide a tax incentive for U.S. corporations to keep certain operations and intangible assets based domestically.

Though, ambiguities remain in the determination of the FDII deduction. The proposed regulations offer some clarity on expense allocation, as well as the treatment of certain sales transactions to related parties.

However, the guidance creates complexities in calculating the FDII deduction. The guidance spells out strict documentation guidelines for supporting an FDII deduction claim, including ordering rules and anti-abuse requirements. Tax advisers must have a practical grasp of the FDII regulations to avoid costly tax consequences.

Listen as our expert panel provides a practical guide to the planning opportunities and reporting challenges of the FDII deduction for U.S. corporations.

READ MORE

Outline

  1. Section 250(a) FDII deduction
  2. Interplay with GILTI provisions
    1. Rate structure
    2. Export incentive
  3. IRS proposed regulations
    1. FDDEI transactions
    2. Ordering rules
    3. Components of FDII computation
    4. Anti-abuse rules
  4. Deductibility of certain related-party transactions
  5. Impact of foreign tax credit changes to FDII
  6. Offshore structuring considerations to take advantage of FDII

Benefits

The panel will review these and other relevant topics:

  • The interplay between Section 250(a) FDII deduction and GILTI provisions of the 2017 tax legislation
  • Recent IRS regulations on calculating the FDII deduction
  • Rules applicable to FDDEI transactions
  • Ordering rules for computing the FDII deduction
  • How to go through the multi-step process to identify, calculate, and claim the FDII deduction
  • Which assets qualify as QBAI and which assets do not
  • Planning opportunities around the FDII deduction

Faculty

Skinner, William
William R. Skinner

Partner
Fenwick & West

Mr. Skinner focuses his practice on U.S. international taxation, with a particular emphasis on tax planning and...  |  Read More

Smith, Tim
Tim Smith

Partner, International Tax Services
Grant Thornton

Mr. Smith is a partner in the international tax practice with Grant Thornton’s Minneapolis office. He also leads...  |  Read More

Other Formats
— Anytime, Anywhere

Download

CPE Not Available

$247