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Tax Reform and U.S. Foreign Reporting for Individuals: New Cross-Border Repatriation and Inclusion Provisions

Navigating Participation Exemption System, GILTI Inclusions, Intangible and Passive Income Treatment

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

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Conducted on Thursday, February 15, 2018

Recorded event now available

or call 1-800-926-7926

This course will provide tax advisers and compliance professionals with a critical first look at the practical impact of the new tax overhaul bill on U.S taxpayers with foreign income and tax reporting obligations. The panel will examine the major changes the new law imposes on calculating and reporting taxable foreign-source income and will introduce the new concepts and practices brought about by the law.

Description

The recent tax overhaul Act represents the most sweeping set of changes to the U.S. income tax code in over 30 years. In particular, the law sets a new framework for the treatment of foreign-sourced income received by U.S taxpayers. While the focus of the new international regime is on corporations, the law contains numerous provisions which will have dramatic impact on U.S. individuals engaged in foreign business activities.

The new law adopts a territorial tax regime system for corporations but puts several mechanisms in place to end prior deferral benefits for U.S. shareholders of foreign business entities. The Act offers reduced rates on repatriation of income but also significantly expands the base of transnational cross-border income that will be subject to current U.S. taxation. The provisions are applicable immediately, with some limited transition relief.

The new law applies to “U.S. shareholders” of “specified foreign corporations” (SFCs), which includes all foreign entities qualifying as CFCs. For purposes of the new foreign tax regime, U.S. shareholder includes any U.S. domestic corporation, partnership, trust, estate or individual that directly, indirectly or constructively owns 10% or more of an SFC’s value or voting power.

Because the new system begins immediately, tax advisers serving individual and small business clients with foreign-source income must avoid costly tax consequences by becoming proficient in the new concepts.

Listen as our experienced panel provides a critical first look at the cross-border implications of the tax reform law.

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Outline

  1. New cross-border provisions and definitions in 2017 tax overhaul bill
  2. U.S. shareholders subject to new foreign provisions
  3. Territorial regime for foreign-sourced qualified dividends
    1. Inclusion in 2017 income of pro rata share of accumulated deferred foreign income of corporation
    2. Participation exemption system
    3. GILTI and inclusion of passive foreign income
  4. Treatment of foreign intangibles

Benefits

The panel will discuss these and other important topics:

  • How the definitions of U.S. shareholders subject to tax on previously deferred foreign-source income have changed under the new law
  • Critical income inclusion and repatriation provisions effective in 2018
  • Treatment of foreign passive and intangible income under the new rules
  • GILTI and application of Subpart F
  • Treatment of foreign tax credits going forward

Faculty

McCormick, Patrick
Patrick J. McCormick, J.D., LL.M.
Principal
Drucker & Scaccetti

Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting...  |  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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