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Rev proc 2018-17 Form: What You Should Know

Rev. Pro. 2018-17— (Sec. 301) Limits the liability of a person with respect to a failure to report foreign base company income. Limits the limitation on gross income of a corporation by the basis of dividends and interest paid or accrued by a subsidiary of the corporation. (Sec. 302) Revises the conditions under which a deferred foreign tax credit is allowed for tax paid or accrued from its first taxable year beginning after November 11, 1994, through the latter of (1) the last day of the calendar year in which such taxable year begins, and (2) December 31 if such credit is fully earned by the mayor on the day immediately preceding the date of payment (Sec. 303) Directs the Secretary to require certain taxpayer entities, which are subject to the AMT, to obtain a written statement from the United States with respect to any taxable year in which either (1) the sum of specified foreign base company income or income dividends is less than 200,000, or (2) the combined cost of property for all specified foreign base company income for taxable years beginning during a single taxable year is less than or equal to 200,000. (Sec. 304) Requires the Secretary, pursuant to regulations prescribed by the Secretary, to establish a threshold income level for tax on income of a corporation derived from specified foreign sources. (Sec. 305) Amends the Internal Revenue Code to exempt from the computation of tax under the Internal Revenue Code, a partnership interest equal to the partner's distributive share of profits accruing under a foreign subsidiary (a non-U.S. controlled foreign corporation). (Sec. 306) Revises the meaning of specified foreign earned income for purposes of the special rule for foreign corporations that are not U.S. corporations by extending the application of such income to certain non-U.S. controlled foreign corporations in which the partnership receives no income (and no capital gains), and by making certain related provisions of the Code applicable to such partnerships (Sec. 307) Allows for an election by a taxpayer to reduce or eliminate qualified joint and survivorship gain in a taxable year by the least of the following amounts: (1) the amount by which the taxpayer's adjusted gross income exceeds 200,000 (as adjusted for inflation under Sec.

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FAQ - Rev proc 2018-17

What is a section 444 election?
No election may be made under section 444(a) by an entity that is part of a tiered structure other than a tiered structure that consists entirely of partnerships and/or S corporations all of which have the same tax year.
Who is a US shareholder of a CFC?
A foreign corporation in which more than 50% of the total combined voting power of its stock or the total value of its stock is owned by "United States shareholders." The Tax Cuts and Jobs Act (Act) expanded the definition of "United States shareholder." Under pre-Act law, a US shareholder for CFC purposes is a US ...
How do I change my taxation period?
Amending Returns Electronically Select the period for which you want to submit an amended return for under "Recent Periods" tab. Select "File, Amend, or Print a Return" under the "I Want To" column. Select "Amend Return" under the "I Want To" column. Complete the online tax return with your amended figures.
What is a specified foreign corporation?
Very generally, a specified foreign corporation means either a controlled foreign corporation, as defined under section 957 ( CFC ), or a foreign corporation (other than a passive foreign investment company, as defined under section 1297, that is not also a CFC) that has a United States shareholder that is a domestic ...
What is constructive ownership?
Another very common type of ownership is referred to as indirect ownership or constructive ownership. Constructive ownership of stock refers to ownership that is attributed to a person (usually) due to their relationship with another person.
What is a related constructive US shareholder?
1c- Related constructive U.S. shareholder- This means an entity controlled by (more than 50% vote or value) the same person which controls the SFC and files only due to this downward attribution.
How do I change accounting year?
In most cases, IRS consent to a tax year change is obtained by filing Form 1128 , Application to Adopt, Change, or Retain a Tax Year. Form 1128 must be filed by the due date (not including extensions) of the tax return for the first effective year.
What is a CFC for US tax purposes?
In the U.S., a CFC is a foreign corporation in which U.S. shareholders own more than 50% of the total combined voting power of all voting stock or the total value of the company's stock.
What is section 898?
26 U.S. Code § 898 - Taxable year of certain foreign corporations.
How do I change my year end with IRS?
File Form 1128 to request a change in tax year. Partnerships, S corporations, personal service corporations (PSCs), or trusts may be required to file the form to adopt or retain a certain tax year.
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