US 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 Wednesday, November 16, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE & CPE 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 a number of unique tax compliance and planning challenges. Determining the character of the partnership’s income as it pertains to 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 certain information regarding their non-U.S. partners. Importantly, the recent overlay of Chapter 4 (FATCA) withholding requirements often means that 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. For partnerships engaged in a trade or business, their income typically will be deemed "effectively-connected income," which has significantly different tax results with respect to 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 both 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. Having a basic understanding of foreign partnerships is key to providing the appropriate advice to U.S. partners, as in many cases using a foreign partnership may be the most advantageous way to handle the myriad issues that can arise.

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 & Foreign Partnerships
  3. Partnership Chapter 3 Withholding & Reporting on:
    1. FDAP & FIRPTA Income
    2. Service & Effectively-Connected Income
    3. Treaty Modifications to Chapter 3 Withholding
  4. Partnership Chapter 4 (FATCA) Withholding & Reporting on:
    1. FDAP & FIRPTA Income
    2. Service & Effectively Connected Income
    3. IGA Modifications to Chapter 4 Withholding
  5. Filing requirements
  6. Case study

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
  • Effects of treaty positions on income taxes and withholding
  • Filing requirements

Faculty

Vacovec, Kenneth
Kenneth J. Vacovec

Founding Partner
Vacovec Mayotte & Singer

Mr. Vacovec practices in all areas of tax law including tax planning for businesses and individuals, estate...  |  Read More

Rafi W. Mottahedeh
Rafi W. Mottahedeh

Jenner & Block

Mr. Mottahedeh focuses on a broad range of federal, state and international tax planning and tax controversy...  |  Read More

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

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$182

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