Foreign Tax Credits: Applying Final Regulations, Categorizing Income, and Preparing Form 1118

Note: CLE credit is not offered on this program

A live 110-minute CPE webinar with interactive Q&A

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Thursday, July 14, 2022

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

Early Registration Discount Deadline, Friday, June 17, 2022

or call 1-800-926-7926

This course will provide an analysis of the final regulations issued in December 2021 and discuss the preparation of Form 1118 for tax practitioners and advisers grappling with these calculations.

Description

The foreign tax credit offers a tax reduction for U.S. taxation of foreign source income. A third set of final regulations on foreign tax credits was released by Treasury in December 2021. These generally follow the prior proposed regulations, but also incorporate changes to tested unit rules needed due to the recent GILTI high-tax exclusion regulations. An attribution requirement replaces the term jurisdictional nexus and is used to determine when a foreign tax qualifies as a foreign income tax.

For Form 1118, Foreign Tax Credit--Corporations, instructions begin with a list of changes required to the form by the 2017 Tax Act. This is followed by a list of form changes required for regulations issued in December 2019 and November 2020. The most recent regulations took effect Mar. 7, 2022.

In addition to the preparation of Form 1118 by corporations, the preparation of this form could be required of individuals who, making a Section 962 election, are taxed as corporations. With Schedules A-L and nine codes for categories of income, the complexities of preparing Form 1118 and calculating this valuable credit has grown phenomenally. Tax practitioners need to understand the effect of recent legislative changes on the calculation of the foreign tax credit and its reporting.

Listen as our panel of experts reviews the complexities of preparing Form 1118, Foreign Tax Credit, the final and proposed regulations, and steps for maximizing this credit.

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Outline

  1. Foreign Tax Credit: introduction
  2. Recent changes
    1. 2017 Tax Act
    2. T.D. 9882, December 2019
    3. T.D. 9922, November 2020
    4. T.D. 9959, December 2021
  3. Preparing Form 1118, Foreign Tax Credit--Corporations

Benefits

The panel will cover these and other key issues:

  • Applying the new attribution requirement to FTC calculations
  • Allocating and apportioning research and experimentation expenditures
  • Identifying Section 245A(d) and non-inclusion income
  • Preparation of Form 1118, Foreign Tax Credit--Corporations
  • Effective dates of regulation changes to FTC calculations

Faculty

Love, Ariel
Ariel Love

Attorney
Fenwick & West

Ms. Love focuses her practice on a broad variety of domestic and international tax planning and tax controversy...  |  Read More

Stefanski, Erika
Erika I. Stefanski, CPA, MST

Senior Director, International Tax
RSM US

Ms. Stefanski leads the firm’s foreign tax credit team. She has been servicing clients in the Great Lakes region...  |  Read More

Murwanto, Kenneth
Kenneth Murwanto

Senior Manager, International Tax
RSM US

Mr. Murwanto leads the firm’s international tax practice in Orange County and the international tax reform...  |  Read More

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Early Discount (through 06/17/22)

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Early Discount (through 06/17/22)

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