IRS Finalizes FATCA Regulations on Requirements for Sponsoring Entities

The IRS recently issued final regulations regarding the Foreign Account Tax Compliance Act (FATCA). The final regulations provide compliance requirements and verification procedures for sponsoring entities of foreign financial institutions (FFIs) and certain nonfinancial foreign entities (NFFEs).  Sponsoring entities are normally FFIs themselves and perform the various FATCA compliance requirements for the sponsored entity.

Foreign Royalties and the New Foreign-Derived Intangible Income Deduction

Part of the TCJA of 2017 was an incentive for retaining intangibles in the US rather than transferring them overseas (or even for bringing them back).  There is a 37.5% deduction for a domestic corporation that has foreign-derived intangible income (FDII).  The deduction is based on the income derived from the sale of property or from services provided to a non-US person.  This provision is similar to the GILTI provisions that look at income in excess of a 10% return on qualified business asset investments (QBAI).

Finalized Transition Tax Regulations: An Overview

The IRS has issued highly anticipated final regulations under Internal Revenue Code Section 965, the Transition Tax (TT) provision added by the Tax Cuts and Jobs Act (TCJA). Sec. 965 generally requires U.S. shareholders to pay a “transition tax” on the untaxed foreign earnings of certain specified foreign corporations (SFC) as if those earnings had been repatriated to the United States.

Do You Qualify for the Section 199A Tax Deduction?

With the Tax Cuts and Jobs Act of 2017 (TCJA) Congress enacted the Section 199A deduction that is available for tax years beginning after December 31, 2017. It is set to expire for tax years beginning after December 31, 2025.
Individuals, trusts and estates with qualified business income, qualified real estate investment trust (REIT) dividends or qualified publicly traded partnership (PTP) income may qualify for the deduction.
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