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Now that you own a controlled foreign corporation (CFC), are you GILTI?

An overview of Global Intangible Low-Taxed Income (GILTI)  Prior to the enactment of the 2017 Tax Cuts and Jobs Act (“TCJA”), the United States generally taxed US taxpayers on their worldwide income. However, US tax on foreign subsidiaries’ active business earnings could be deferred until such earnings were repatriated to the United States. The Global […]

The Downward Spiral of Downward Attribution

The Tax Cuts and Jobs Act (TCJA) created significant changes for both taxpayers and practitioners. One of the most disruptive and wide-ranging changes to taxpayers of TCJA was the repeal of Internal Revenue Code (IRC) Section 958(b)(4), effective as of January 1, 2018. Background A foreign corporation is treated as a controlled foreign corporation (CFC) […]

IRS lacks statutory authority to assess penalties under section 6038(b) for willful failure to file Form 5471

On April 3, 2023, the United States Tax Court ruled in Alon Farhy v. Commissioner, 160 T.C. No. 6 that the Internal Revenue Service (IRS) did not have authority to assess penalties under Internal Revenue Code (IRC) section 6038(b) against a taxpayer who willfully failed to file Form 5471, Information Return of US Persons With Respect […]

Loans to or from a foreign trust 

Loans to or from a foreign trust by US persons may be treated as either a contribution to the trust, or a distribution from the trust. Qualified Loan To avoid this treatment the loan must be a “Qualified Loan”.   To be a “Qualified Loan” the following requirements must be met: The obligation must be in […]

USTAXFS makes strategic promotions to support continued growth

USTAXFS underpins the Corporate and Funds Tax Group exponential growth with key regional promotions  We are pleased to announce that USTAXFS has promoted two senior team members in both London and Geneva into Director positions. Inna Ganz in Geneva and Stacy Martin in London are now US Tax Directors within the fast-growing Corporate and Funds […]

Unrelated Business Taxable Income (UBTI) issues for Private Equity and Venture Capital Funds

Private Equity (PE) and Venture Capital (VC) funds often attract significant investment from US tax-exempt entities.  In doing so, these funds may need to avoid having Unrelated Business Taxable Income (UBTI).  This article will address some of the scenarios that can cause a fund to generate UBTI. US tax-exempt entities such as qualified pension funds, […]

IRS Issues Guidance and Solicits Feedback on Nonfungible Tokens (“NFTs”)

On March 21, 2023, the Treasury Department and the Internal Revenue Service (the “IRS”) announced that they were requesting comments regarding upcoming guidance on US tax treatment of certain nonfungible tokens (“NFTs”) as collectibles under Internal Revenue Code (IRC) section 408(m). NFTs An NFT is a unique digital identifier that is used to certify ownership and […]

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