U.S. Partnerships With Foreign Partners: Navigating Withholding, Informational Reporting and Payment Requirements

Determining ECI, FDAP, FIRPTA Income Classifications, Treaty Benefits, Basis Adjustments and Sale Treatment

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


Conducted on Thursday, September 20, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide tax advisers and compliance professionals with a thorough and practical guide to the issues faced by U.S. partnerships with foreign partners. The panel will discuss the various withholding requirements for non-U.S. partners, treaty structures (including limitation on benefits provisions), and often overlooked capital account adjustments particular to foreign partners.

Description

Tax advisers serving partnerships with foreign (non-U.S.) partners have unique tax compliance and planning challenges. Determining the character of the partnership’s income regarding the foreign partner is a critical first step for tax professionals advising partnerships with non-U.S. partners.

The Service requires U.S. partnerships to collect and report specific information regarding their non-U.S. partners. Importantly, the recent overlay of FATCA withholding requirements often means partnerships and other business entities must make two different determinations of whether withholding is required.

U.S. tax law provides several different withholding requirements for foreign partners, depending on the type of income the partnership receives and the manner in which the partnership conducts its activities. The TCJA made several significant alterations to the withholding requirements for foreign partners of U.S. partnerships.

For partnerships engaged in a trade or business, their income typically will be deemed “effectively-connected income,” which has significantly different tax results concerning both withholding consequences and tax rates than income that is not generated from being engaged in a trade or business.

Partnership tax advisers also must understand the effects of treaties on the treatment of a partnership and its partners, as they may reduce or eliminate withholding requirements and income taxes on certain types of income.

Listen as our experienced panel provides a comprehensive and practical guide to the tax planning and reporting issues specific to partnerships with foreign partners.

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Outline

  1. Income taxation of partnerships with foreign partners
  2. Blocker corporations and foreign partnerships
  3. Partnership Chapter 3 withholding and reporting
  4. Partnership Chapter 4 (FATCA) withholding and reporting
  5. TCJA changes to withholding calculations
  6. Filing requirements

Benefits

The panel will discuss these and other important issues:

  • Documentation partnerships must obtain from foreign partners and associated reporting to the IRS
  • Withholding requirements for effectively-connected income for foreign partners
  • Withholding requirements for FDAP, FIRPTA and other non-business partnership income
  • Use of blocker corporations and other intermediate entities
  • Impact of treaty positions on income taxes and withholding
  • Filing requirements

Faculty

Bae, Alfred
Alfred H. Bae
Ernst & Young
Ryan, Rita
Rita M. Ryan

Vacovec Mayotte & Singer

Ms. Ryan practices in the areas of international and domestic taxation, estate planning, and tax controversy....  |  Read More

Kerr, Arthur
Arthur R. Kerr, II

Partner
Vacovec Mayotte & Singer

Mr. Kerr concentrates his practice in international and domestic taxation, business law, contracts, and real estate....  |  Read More

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