Details

This course examines the practical business, transactional, and tax policy implications of three major areas of U.S. international tax ¿ foreign entity classification for tax purposes, the contours of the controlled foreign corporation anti-deferral regime, and the role of the foreign tax credit in such settings. It initially addresses the check-the-box elective foreign entity classification rules and the impact they have had on international tax planning. The ability to select disregarded entity status for purposes of the United States while at the same time treat the entity in the foreign jurisdictions as a separate entity and vice versa has presented tax practitioners with a multitude of planning possibilities. Thereafter the intricacies of classification as a controlled foreign corporation (CFC) and the imputation of certain tainted income that may flow from such classification is explored in depth. The tainted income rules and the impact on structuring active and passive CFC business income is studied in detail. Finally, the impact of both the direct and indirect foreign tax credit on the residual U.S. taxation of CFC earnings is taken into account and the limitations on the foreign tax credit and selected planning strategies are explored.