International Tax Lunch: Section 962Æ’?"Should I Be Taxed As A Corporation?

Description

The new international tax rules now make most foreign corporation income immediately taxable to U.S. shareholders (via the Subpart F and GILTI rules). Section 962 gives individual taxpayers an election to be taxed on Subpart F income and GILTI at corporate tax rates (21%) rather than individual tax rates (as high as 37%).

Should individual shareholders make this election? (Hint: the election's consequences are not all rainbows and unicorns.)

Highlights

• Subpart F income
• GILTI.
• Taxation of individual shareholders of controlled foreign corporations.
• Direct and indirect foreign tax credit.
• The IRC §962 election.
• Holding structure choices for American shareholders in foreign corporations. 

Objectives

• How does the Section 962 election work?
• The three changes that the election makes to an individual shareholder's calculation of tax liability.
• How does a Section 962 election compare to other tax strategies for individual shareholders of foreign corporations?

Designed For

Lawyers and CPAs.