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Repatriation Tax Planning: Inbound Asset Transfers, Cash Dividends and Other Strategies for Tax Professionals

Tax Attributes Under Section 367(b) and Tax Reform Alterations, Deemed Dividends, Section 245A Participation Exemption

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

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Conducted on Tuesday, October 30, 2018

Recorded event now available

or call 1-800-926-7926

This course will guide tax professionals and advisers on tax challenges involving inbound asset transfers, cash dividends and other repatriation strategies post-tax-reform. The panel will discuss tax issues associated with inbound liquidations under Section 332 and reorganizations under Section 368, actual and deemed dividends, Section 245A participation exemption, and tax planning methods to achieve and maintain tax benefits for the U.S. taxpayer.

Description

Tax reform had a significant impact on the earnings and profits of U.S. taxpayers regarding inbound asset transfers. The new tax law, specifically the imposition of Section 965, GILTI and Section 245A, altered the application of Section 367(b) and the tax planning issues and considerations for repatriation of foreign cash, requiring careful planning by tax professionals to ensure that U.S. taxpayers obtain any allowable tax benefits.

Before tax reform, such earnings and profits were considered deemed dividends and fully taxable. Now, earnings and profits from inbound asset transfers may be subject to other newly enacted tax rules that avoid the application of Section 367(b), such as the conversion of pre-tax reform earnings into previously taxed income under Section 965 or earnings and profits previously taxed under subpart F or GILTI. Previously taxed income and the participation exemption may support tax-free dividends out of much foreign earnings and profits.

Any deemed dividends from inbound asset transfers taxable to an acquiring U.S. corporation or its shareholders may also qualify as tax-free transactions under subchapter C rules as applied to liquidations and reorganizations or be fully deductible under new Section 245A by meeting specific requirements. Tax professionals and advisers must become knowledgeable of the impact of newly enacted tax law on inbound asset transfers to properly advise taxpayers and develop planning methods to ensure an optimum level of tax benefits.

Listen as our panel discusses the application of Section 367(b) to inbound asset transfers, the taxation of such earnings or profits to U.S. taxpayers, the impact of newly enacted tax law, and tax planning methods to achieve and maintain tax benefits to U.S taxpayers.

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Outline

  1. Application of Section 367(b) and regulations to inbound asset transfers
  2. Comparison of Sectoni 367(b) with other methods of repatriating foreign cash, such as actual dividends and deemed dividends under Section 304
  3. The treatment of previously taxed income in repatriation and inbound asset transfers, foreign exchange and stock basis consequences
  4. Foreign tax credit consequences of inbound asset transfers and repatriation transactions
  5. Subchapter C rules and inbound asset transfers as tax free transactions
  6. Tax planning tips and mechanisms to achieve and maintain tax benefits in inbound asset transfer and repatriation transactions

Benefits

The panel will analyze and tackle these and other relevant topics:

  • How the operation of Section 367(b) and the treatment of actual and deemed dividends has changed post-Tax Reform
  • Avoiding tax traps for U.S. taxpayers on repatriation of overseas cash
  • The impact of newly enacted tax rules on repatriation strategies for foreign corporations owned by U.S. taxpayers
  • Requirements of Section 245A and obtaining full deduction of deemed dividends
  • Inbound asset transfers as tax-free transactions under subchapter C
  • Foreign tax credit and foreign exchange consequences of repatriation of cash in the new environment
  • Best practices and planning techniques for tax professionals and advisers regarding repatriation of foreign cash

Faculty

Knobler, Michael
Michael Knobler
Attorney
Fenwick & West

Mr. Knobler focuses his practice on U.S. international and domestic tax planning, mergers and acquisitions, and...  |  Read More

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

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