Subpart F Expansion After Tax Reform: Increased Tax Liability and Reporting Obligations

New Controlled Foreign Corporation and U.S. Shareholder Definitions, GILTI, Transition Tax

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


Wednesday, December 5, 2018

1:00pm-2:50pm EST, 10:00am-11:50am PST

or call 1-800-926-7926

This webinar will provide tax advisers with a practical overview to the significant changes the 2017 tax reform law made to Subpart F tax treatment of controlled foreign corporations (CFCs). The panel will detail in plain language the specific areas where the law expanded Subpart F, including for example the new "downward" attribution rules, and discuss how these changes will create new foreign information reporting requirements on Form 5471.

Description

The changes brought about in the 2017 tax reform law continue to reverberate in the area of information reporting and tax liability attributable to foreign subsidiary assets and activities. With the new GILTI provisions and transition tax on specific offshore holdings, as well as changes to the determination of foreign subsidiaries subject to these provisions, the law expands the reach of the historic Subpart F regime, and taxpayers and advisers alike are still coming to grips with the increased planning issues and reporting duties.

The Subpart F rules require “U.S. shareholders” of CFCs to treat certain types of income as taxable in the current year. These calculations have long presented significant challenges to tax advisers serving clients with CFC holdings.

The new law adds additional complexity to an already-complex regime. The changes have caused an increase in the number of foreign corporations treated as CFCs subject to reporting and tax requirements, as well as the amount of income liable to current US taxation. In addition to the substantive tax determinations, tax advisers must know whether the new rules create new filing obligations to avoid severe penalties for foreign information reporting noncompliance.

Listen as our authoritative panel of international tax practitioners reviews the Subpart F rules and provides a practical guide to the specific changes the 2017 tax law makes to determining CFC ownership and reporting obligations.

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Outline

  1. Existing Subpart F framework
    1. Identify the definition for a controlled foreign corporation
    2. “U.S. shareholder”
    3. Income inclusions and rates
    4. Allowable exclusions
  2. Expansion of Subpart F in new tax reform law
    1. Expanded definition of controlled foreign corporation and U.S. shareholder
    2. Additional income included in calculation base
    3. Disparate treatment between corporate shareholders and individual shareholders of CFCs
    4. Downward attribution rules
  3. Section 951A GILTI current tax
  4. Section 965 transition tax
  5. Identifying new Form 5471 reporting obligations

Benefits

The panel will discuss these and other important topics:

  • How the 2017 tax law’s expansion of the definitions of CFCs and U.S. shareholders will create new tax and reporting obligations for U.S. taxpayers previously exempt from filing duties
  • Constructive ownership tests in CFCs after the new downward attribution rules
  • How the Subpart F changes run counter to the tax law’s general aim to convert to more territorial taxation of U.S. taxpayers as opposed to global-based
  • Treatment of earnings invested in U.S. property

Faculty

Acharya, Pallav
Pallav Acharya, CPA, FCA, CGMA

Founder and Owner
CPA Global Tax & Accounting

Mr. Acharya provides tax and accounting services, specializing in international tax and business issues. He advises his...  |  Read More

Fuller, Pamela
Pamela A. Fuller, JD, LLM

Of Counsel
Tully Rinckey

Ms. Fuller advises a wide range of clients--including private and public companies, joint ventures, private equity...  |  Read More

Sams, James
James K. Sams
Principal
KPMG

Mr. Sams is attached to the firm's International Corporate Tax Services Practice, providing high-level technical...  |  Read More

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