FDII Income Deduction for U.S. Exports: Allocation Methodology, Intersection With R&D Tax Credit

A live 90-minute premium CLE/CPE video webinar with interactive Q&A


Wednesday, January 6, 2021

1:00pm-2:30pm EST, 10:00am-11:30am PST

Early Registration Discount Deadline, Friday, December 4, 2020

or call 1-800-926-7926

This CLE/CPE webinar will provide tax counsel and advisers guidance on the rules and reporting requirements for Section 250 tax deduction for foreign-derived intangible income (FDII). The panel will discuss new IRS regulations, identifying deduction-eligible income (DEI) and foreign-derived deduction-eligible income (FDDEI), the mechanics of allocation methods and calculations, and utilizing this deduction to reduce tax rates.

Description

Section 250 deduction for FDII provides tax incentives to U.S. exporters. It allows domestic corporations to deduct 50 percent on their GILTI inclusion and associated Section 78 gross-up amount and 37.5 percent on their FDII. Tax counsel and advisers must consider using these tax incentives in business structures and tax planning techniques for U.S. exporters.

The final regulations change documentation standards and explain what fulfills the substantiation requirements. They also confirm a taxpayer's ability to claim the Section 250 deduction concerning its GILTI inclusion and associated Section 78 gross-up amount when an individual taxpayer elects, under Section 962, to be taxed as a corporation.

The regulations modify how to determine foreign persons and foreign branch income and whether sales of general property through related parties and intangible property sales generate FDDEI. There are revisions on the sale of digital property and the provision of certain services.

However, computing the deduction is somewhat complicated and requires the determination of DEI, DII (deduction-intangible income), DTIR (deemed tangible income return), and FDDEI. Understanding the calculation components and how to maximize the Section 250 deduction is critical for tax counsel and advisers working with companies doing business abroad.

Listen as our panel of tax attorneys and advisers provides an in-depth analysis of the final Section 250 regulations, identifying DEI and FDDEI, the mechanics of allocations and calculations, and best practices in utilizing the deduction to minimize taxes.

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Outline

  1. Recent IRS Section 250 regulations
  2. Navigating FDII rules and requirements
  3. Identifying DEI and FDDEI
  4. Allocation methods and calculations
  5. Domestic intermediary rules
  6. Best practices and techniques for using Sec. 250 deduction to reduce tax rates

Benefits

The panel will review these and other critical issues:

  • Recent IRS regulations for Section 250 deduction
  • Understanding FDII rules and pitfalls
  • Identifying DEI and FDDEI and effective tax planning
  • Expenses and allocation methods and calculations
  • Understanding domestic intermediary rules
  • Best practices for using the Sec. 250 deduction and caveats to consider

Faculty

Fuller, Pamela
Pamela A. Fuller, JD, LLM

Senior International Tax Counsel
Zahn Law Group

Ms. Fuller’s practice has a triple focus: tax planning, tax controversies, and tax compliance. She advises a wide...  |  Read More

Additional faculty
to be announced.

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