In many cases GILTI eliminates meaningful opportunities for deferral of U.S. Federal income tax on foreign earnings of U.S. owned foreign corporation and essentially imposes a 10.5% minimum tax.Under final regulations issued in June 2019, complex issues of computing the current inclusion, return of qualified business asset investment, high tax exception for Subpart F income and related foreign tax credit issues are addressed.  The webinar will cover the more significant provisions of the regulations with worked examples and planning suggestions.

TCAJA introduced two alternative tax regimes available to U.S. based businesses serving foreign markets.  The two regimes are the Foreign Derived Intangible Income (FDII) available only to domestic C corporations and Qualified Business Income (QBI) Deduction (§199A).  FDII offered a 13.125% effective corporate tax for C corporations.  QBI offers an effective rate of 29.6% to individuals and noncorporate owners of passthrough business entities.  These two essentially alternative and mutually exclusive concepts need to be considered by practitioners advising clients with foreign customers.  Both provisions with emphasis on FDII will be illustrated with worked examples reflecting the latest available guidance.

With deferral of U.S. income taxation of foreign earnings largely gone, a working knowledge of the new and changed mechanisms for elimination of double taxation is needed by tax practitioners.  In addition to covering the new participation exemption and the many changes to the foreign tax credit regime, the webinar will cover changes to the allocation of expenses under the expanded basket system for the determination of limits on the crediting of foreign income tax, treatment of withholding taxes and distributions of previously taxed foreign earnings, allocation of distributions from foreign corporation among the various categories of previously taxed income and other earnings and profits and the election by U.S. individuals of C corporation treatment for inclusion of foreign earnings under Subpart F and GILTI under Section 962.  These topics will be covered through a series of worked examples.