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GILTI Calculations for Individual U.S. Shareholders: Section 951A

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

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Conducted on Monday, October 2, 2023

Recorded event now available

or call 1-800-926-7926

This course will provide tax advisers with a practical guide to the global intangible low-taxed income (GILTI) provisions. The panel will detail the tax calculations and reporting requirements for taxpayers with GILTI inclusions and describe planning opportunities to minimize the tax impact on individuals with GILTI inclusions.

Description

Section 951A requires U.S. shareholders of controlled foreign corporations (CFCs) to include in gross income the shareholder's GILTI for the tax year. Tax advisers must identify the tax consequences for their clients that are U.S. shareholders in CFCs.

GILTI is an anti-deferral regime that may subject U.S. shareholders (as defined in Section 951(b)) of a CFC to tax on all or a portion of the CFC's income. GILTI is calculated under a complex formula but essentially requires U.S. shareholders to include into gross income CFC net income (subject to certain exceptions) less a routine return on certain CFC tangible depreciable property (qualified business asset investment or QBAI) with adjustments for specified interest expense. QBAI generally includes tangible depreciable personal property used to generate CFC tested income and does not include intangible property.

Critical to the tax impact of GILTI is the disparate treatment between corporate and individual taxpayers. C corporations are generally entitled to a Section 250 deduction for GILTI and the Section 78 gross-up attributable to the GILTI inclusion and an indirect foreign tax credit for certain foreign income taxes paid or accrued by the CFC subject to foreign tax credit limitation rules. Absent a Section 962 election, individual U.S. shareholders aren't eligible for these benefits, resulting in a much higher tax impact on individuals than on corporate entities.

Listen as our expert panel provides a thorough and practical guide to the mechanics of identifying, calculating, and reporting GILTI income for individual taxpayers.

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Outline

  1. Section 951A overview
  2. Treatment of domestic partnerships and their partners
  3. Planning opportunities for individuals to minimize the tax impact of GILTI
  4. GILTI high-tax exclusion
  5. Section 962 election considerations

Benefits

The panel will review these and other essential matters:

  • When an individual is subject to tax under IRC 951A
  • Calculating QBAI
  • The application of GILTI to domestic partnerships and their partners
  • The GILTI high-tax exclusion
  • The benefits and cons of a Section 962 election

Faculty

Dokko, Sean
Sean Dokko, J.D., LL.M.
International Tax Partner
Citrin Cooperman

Mr. Dokko is a partner in Citrin Cooperman’s International Tax Practice and is based out of the New York office....  |  Read More

Neumeyer, Daniel
Daniel J. Neumeyer, JD, LLM
Tax Manager
CLA (CliftonLarsonAllen LLP)

Mr. Neumeyer focuses his practice on international tax issues. In particular, he helps lead CLA’s delinquent...  |  Read More

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