GILTI Calculations for Individual CFC Shareholders: New Section 951A Tax on Foreign Intangible Income

Transcription

1 GILTI Calculations for Individual CFC Shareholders: New Section 951A Tax on Foreign Intangible Income FOR LIVE PROGRAM ONLY TUESDAY, MAY 22, 2018, 1:00-2:50 pm Eastern IMPORTANT INFORMATION FOR THE LIVE PROGRAM This program is approved for 2 CPE credit hours. To earn credit you must: Participate in the program on your own computer connection (no sharing) if you need to register additional people, please call customer service at ext.1 (or ext. 1). Strafford accepts American Express, Visa, MasterCard, Discover. Listen on-line via your computer speakers. Respond to five prompts during the program plus a single verification code. To earn full credit, you must remain connected for the entire program. WHO TO CONTACT DURING THE LIVE EVENT For Additional Registrations: -Call Strafford Customer Service x1 (or x1) For Assistance During the Live Program: -On the web, use the chat box at the bottom left of the screen If you get disconnected during the program, you can simply log in using your original instructions and PIN.

2 Tips for Optimal Quality FOR LIVE PROGRAM ONLY Sound Quality When listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, please immediately so we can address the problem.

3 GILTI Calculations for Individual CFC Shareholders: New Section 951A Tax on Foreign Intangible Income TUESDAY, MAY 22, 2018 Jeffrey T. Zawada, CPA, Director Freed Maxick CPAs, Buffalo, N.Y. Susan V. Steblein, CPA, MBA, Senior Manager Freed Maxick CPAs, Buffalo, N.Y.

4 Notice ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY THE SPEAKERS FIRMS TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN. You (and your employees, representatives, or agents) may disclose to any and all persons, without limitation, the tax treatment or tax structure, or both, of any transaction described in the associated materials we provide to you, including, but not limited to, any tax opinions, memoranda, or other tax analyses contained in those materials. The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.

5 GILTI Calculations for Individual CFC Shareholders: New Section 951A Tax on Foreign Intangible Income Changes to Subpart F Controlled Foreign Corporation Treatment, Recognizing QBAI and More Presented by Jeff Zawada & Susan Steblein May 22, 2018

6 Outline 1. Section 951A provisions 2. Prior Subpart F/CFC treatment 3. Identifying QBAI 4. Calculating GILTI 5. Planning opportunities to minimize tax impact of foreign intangible holdings 6

7 Section 1: Section 951A Provisions What is it and who is subject to it? A new provision of the 2017 Tax Cuts and Jobs Act, signed into law December Effective for taxable years of foreign corporations beginning after December 31, 2017, and for U.S. Shareholders in which or with which such taxable years of foreign corporations end. Under the provision, a U.S. shareholder of any Controlled Foreign Corporation ( CFC ) must include in gross income for a taxable year its global intangible lowtaxed income ( GILTI ) in a manner generally similar to inclusions of subpart F income. GILTI means, with respect to any U.S. shareholder for the shareholder s taxable year, the excess (if any) of the shareholder s net CFC tested income over the shareholder s net deemed tangible income return. The shareholder s net deemed tangible income return is an amount equal to 10 percent of the aggregate of the shareholder s pro rata share of the qualified business asset investment ( QBAI ) of each CFC with respect to which it is a U.S. shareholder. 7

8 Section 1: Section 951A Provisions Who is a U.S. shareholder? Section 7701(a)(30) defines a United States Person as a citizen or resident of the United States, a domestic partnership, a domestic corporation, any estate (other than certain foreign estates), and certain trusts (US court exercised primary supervision and US persons control). The term U.S. Shareholder means, with respect to any foreign corporation, as a United States Person (as defined above) who owns, or is considered as owning by applying the rules of constructive ownership, 10 percent or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation, or 10 percent or more of the total value of shares of all classes of stock of such foreign corporation ( 951(b)). For GILTI purposes, a person shall be treated as a United States shareholder of a CFC for any taxable year of such person only if such person owns stock in such foreign corporation on the last day in the taxable year of such foreign corporation on which such foreign corporation is a CFC ( 951A(e)(2)). Additionally, if GILTI or Subpart F is applicable, it will only apply to the U.S. Shareholders who own CFC stock directly or own stock indirectly through foreign corporation, foreign partnership, or foreign trust or foreign estate ( 958(a) as referenced by 951A(e)(2)). 8

9 Section 1: Section 951A Provisions What is a Controlled Foreign Corporation ( CFC ) A CFC is: Any foreign corporation if more than 50% of the total combined voting power of all classes of stock of such corporation entitled to vote, or total value of the stock of such corporation, is owned, or is considered as owned by applying the rules of constructive ownership, by United States shareholders on any day during the taxable year of such foreign corporation ( 957(a)). For purposes of GILTI, a foreign corporation shall be treated as a CFC for any taxable year if such foreign corporation is a CFC at any time during such taxable year ( 951A(e)(3)). 9

10 Section 1: Section 951A Provisions Importance in Identifying a CFC It is very important to be able to identify a foreign corporation as a CFC or not a CFC. Once identified as a CFC, the following may be applicable to the US Shareholders: Subpart F Income Global Intangible Low-Taxed Income Income to be recognized on CFC investment of earnings in US property Reporting requirements (with hefty penalties for non-compliance) 10

11 Section 1: Section 951A Provisions Example 1 For all of 2018, one US citizen (Joe B.) directly owns 51% of the vote and value of a foreign corporation. A non-us individual directly owns the other 49%. The foreign corporation is on a calendar year. Conclusion: Is Joe B. a U.S. Shareholder? Yes, Joe B. is a US Person who owns greater than 10% of the vote or value of the foreign corporation. Do we have a CFC? Yes, greater than 50% vote or value owned by US Shareholders. Joe B. is subject to the provisions of Subpart F, GILTI, Investment in Earnings of US Property and the related reporting requirements as a result of his direct ownership interest as he is a U.S Shareholder of the CFC on the last day of the CFC s taxable year. 11

12 Section 1: Section 951A Provisions Example 2 For all of 2018, one US citizen(nick Z.) directly owns 100% of a US C-Corporation which owns 51% of the vote and value of a foreign corporation. A non-us person owns the other 49%. US-Co and foreign corporation are both on a calendar year. Conclusion: Is US-Co a U.S. Shareholder? Yes, US-Co is a US Person who directly owns greater than 10% of the vote or value of the foreign corporation. Is Nick Z. a U.S. Shareholder? Yes, Nick Z. is a US Person who indirectly owns greater than 10% of the vote or value of the foreign corporation. Do we have a CFC? Yes, greater than 50% vote or value owned by a US Shareholders (both US-Co directly and Nick Z indirectly). US-Co is subject to the provisions of Subpart F, GILTI, Investment in Earnings of US Property and the related reporting requirements. This is because of direct ownership and because US-Co was a U.S Shareholder of the CFC on the last day of the CFC s taxable year. Nick Z. is not directly subject to these provisions, except for certain reporting requirements. 12

13 Section 1: Section 951A Provisions Example 3 For all of 2018, one US citizen (Jeannette M.) directly owns 51% of a US partnership (a non-us person owns the other 49%) which owns 100% of the vote and value of a foreign corporation. US partnership and foreign corporation are both on a calendar year. Conclusion: Is US partnership a U.S. Shareholder? Yes, US partnership is a US Person who directly ownsgreater than 10% of the vote or value of the foreign corporation. Is Jeannette M. a U.S. Shareholder? Yes, Jeannette M. is a US Person who indirectly owns greater than 10% of the vote or value of the foreign corporation. Do we have a CFC? Yes, greater than 50% vote or value owned by a US Shareholders. (both US partnership directly and Jeannette M. indirectly). US partnership is subject to the provisions of Subpart F, GILTI, Investment in Earnings of US Property and the related reporting requirements on 100% direct interest in foreign corporation. This is because of direct ownership and because US partnership was a U.S Shareholder of the CFC on the last day of the CFC s taxable year. Jeannette M. is not directly subject to these provisions, except for reporting requirements. However, the income will flow thru to her on her partnership K-1 for her 51% interest. 13

14 Section 1: Section 951A Provisions Example 4 For all of 2018, one US citizen (Cara R.) directly owns 1% of a US partnership (a non-us person owns the other 99%) which owns 100% of the vote and value of a foreign corporation. US partnership and foreign corporation are both on a calendar year. Conclusion: Is US partnership a U.S. Shareholder? Yes, US partnership is a US Person who directly owns greater than 10% of the vote or value of the foreign corporation. Is Cara R. a U.S. Shareholder? No, Cara R. is not a US Shareholder as she indirectly owns less than 10% of the vote or value of the foreign corporation. Do we have a CFC? Yes, greater than 50% vote or value owned by a US Shareholders. (the US partnership). US partnership is subject to the provisions of Subpart F, GILTI, Investment in Earnings of US Property and the related reporting requirements on 100% interest in foreign corporation. This is because of direct ownership and because US partnership was a U.S Shareholder of the CFC on the last day of the CFC s taxable year. Cara R. is not directly subject to these provisions, except for reporting requirements. However, the income will flow through on the partnership K-1. 14

15 Section 1: Section 951A Provisions Example 5 For all of 2018, one US citizen (Alex S.) directly owns 51% of a foreign partnership (a non-us person owns the other 49%) which owns 100% of the vote and value of a foreign corporation. US partnership and foreign corporation are both on a calendar year. Conclusion: Is Foreign partnership a U.S. Shareholder? No, Foreign partnership is not a U.S. Person and therefore not a U.S. Shareholder. Is Alex S. a U.S. Shareholder? Yes, Alex S. is a US Person who indirectly owns greater than 10% of the vote or value of the foreign corporation (see indirect ownership rule above). Do we have a CFC? Yes, greater than 50% vote or value owned by a US Shareholders. (Alex S. indirectly). Alex S. is subject to the provisions of Subpart F, GILTI, Investment in Earnings of US Property and the related reporting requirements on 51% indirect interest in foreign corporation. This is because of indirect ownership through a foreign partnership of which he is a U.S Shareholder of the CFC on the last day of the CFC s taxable year. 15

16 Section 1: Section 951A Provisions Flowchart Start Is the foreign corp. a CFC? No GILTI does not apply Yes Are you a direct US Shareholder of the CFC? No Are you an indirect US Shareholder of the CFC? Yes Yes No GILTI should apply to you as a U.S. Shareholder. GILTI does not apply Note: flowchart assumes U.S. Shareholders already identified and indirect interest is through a direct interest in the entity specified. Is the direct US shareholder a US C-Corp Yes GILTI should apply to the C-Corp No Is the direct US shareholder a US flowthru entity? Yes GILTI should apply to the flow-thru, but taxed at partner or shareholder level. No Is the direct shareholder a foreign entity? Yes GILTI should apply to you as a U.S. Shareholder. 16

17

18 Section 2: Prior Subpart F/CFC treatment What is Subpart F Income? U.S. Shareholders of CFC s recognize Subpart F income in the year it is incurred. Subpart F income consists of: Insurance Income Foreign Base Company Income Foreign Personal Holding Company Income Foreign Base Company Sales Income Foreign Base Company Service Income Income from boycott operations Amounts pertaining to illegal kickbacks, bribes, etc. Income derived in certain foreign countries 18

19 Section 2: Prior Subpart F/CFC treatment Pre- TCJA 2017 Earnings and Profits of CFCs were permanently deferred until distributed. Exceptions: Subpart F and Investment of earnings in US Property Acceleration of income under Subpart F and Investment of earnings in US Property provided the following: Previously Taxed Income exception on future distributions ( 959) (i.e. U.S. Shareholders are not taxed again upon distribution) US Shareholder increases basis in CFC for acceleration of income and reduces for future distributions ( 961) C-Corporations could get a deemed paid credit for the foreign corporation s foreign income tax 19

20 Section 2: Prior Subpart F/CFC treatment Pre- TCJA 2017 Example For all of 2017, one US citizen directly owns 51% of the vote and value of a foreign corporation. A non-us individual directly owns the other 49%. The foreign corporation is on a calendar year. Individual A acquired their 51% interest in 2016 for $1.0 million. The foreign corporation is a CFC and has $100,000 of foreign personal holding company income, which is considered Subpart F income. As a result, Individual A needs to recognize $51,000 of Subpart F income in Additionally, their basis in the stock of the CFC is now $1,051,000. If the CFC makes a $51,000 distribution to Individual A after 2017, it will first be considered a return of previously taxed income, and therefore not taxed in the US again. At that time, Individual A s basis in the stock of CFC will return to $1.0 million. 20

21 Section 2: Prior Subpart F/CFC treatment Post- TCJA 2017 Earnings and Profits of CFCs are still permanently deferred until distributed (Dividends received by a C-Corporation from a qualified 10% owned foreign corporation receive a full dividend received deduction). Exceptions: GILTI, Subpart F and Investment of earnings in US Property (C- Corporations are allowed a deduction for 50% of GILTI and an 80% foreign tax credit) Acceleration of income under GILTI, Subpart F and Investment of earnings in US Property provided the following: Previously Tax Income exception on future distributions ( 959) US Shareholder increases basis in CFC for acceleration of income and reduces for future distributions ( 961) C-Corporations could get a deemed paid credit for the foreign corporation s foreign income tax 21

22 Section 2: Prior Subpart F/CFC treatment Post- TCJA 2017 Example For all of 2018, one US citizen directly owns 51% of the vote and value of a foreign corporation. A non-us individual directly owns the other 49%. The foreign corporation is on a calendar year. Individual A acquired their 51% interest in 2017 for $1.0 million. The foreign corporation is a CFC and has $100,000 of foreign personal holding company income, which is considered Subpart F income. Additionally, the CFC has $100,000 of GILTI. As a result, Individual A needs to recognize $102,000 of Subpart F and GILTI income in 2018 ($51,000 for each). Additionally, their basis in the stock of the CFC is now $1,102,000. If the CFC makes a $102,000 distribution to Individual A after 2018, it will first be considered a return of previously taxed income, and therefore not taxed in the US again. At that time, Individual A s basis in the stock of CFC will return to $1.0 million. 22

23 Section 2: Prior Subpart F/CFC treatment Domestic Corporation Relating to the dividends received deduction for foreign dividends under new 245 and 245A, and the deduction for GILTI under 250, it references these deductions as being eligible to domestic corporations. What is a domestic corporation? Does it include S-Corporations? 1373(a) provides that for the foreign tax credit ( ) and CFCs ( ), an S-Corporation shall be treated as a partnership, and the shareholders shall be treated as partners. As a result, we don t believe the foreign dividend received deduction or GILTI deduction are applicable to S-Corporations. 23

24 Section 3: Identifying QBAI GILTI is, with respect to any US shareholder for any tax year of the US shareholder, the excess (if any) of: (A) The shareholder s net CFC tested income for the tax year, over (B) The shareholder s net deemed tangible income return for the tax year The net deemed tangible income return is, with respect to any US shareholder for any tax year, the excess of: (A) 10% of the aggregate of the shareholder s pro rata share of the qualified business asset investment of each CFC with respect to which the shareholder is a US shareholder for the tax year over (B) The amount of interest expense taken into account in determining the shareholder s net CFC tested income for the tax year to the extent the interest income attributable to the expense is not taken into account in determining the shareholder s net CFC tested income 24

25 Section 3: Identifying QBAI The qualified business asset investment QBAI is, with respect to any CFC, the average of the corporation s aggregated adjusted bases as of the close of each quarter of the tax year in specified tangible property used in a trade or business of the corporation, and, of a type with respect to which a deduction is allowable under Code Sec Specified tangible property is any tangible property used in the production of tested income. Based on the wording of Section 951A(d)(2)(A) this will only include specified tangible property used to generate tested income. Therefore, those CFCs which generate a tested loss will not have their tangible property included as part of the QBAI used to determine the net deemed tangible income return The adjusted basis is determined by using the Alternative Depreciation System. Depreciation deduction can be allocated to the property ratably to each day during the period in the tax year to which the depreciation relates. 25

26 Section 3: Identifying QBAI Dual use property property used in both production of tested income and income that is not tested income is treated as specified tangible property in same proportion that the gross income produced included as tested income bears to the total gross income. If CFC holds an interest in a partnership at close of CFC s taxable year, the CFC will take into account its distributive share of the aggregate of the partnership s adjusted bases in tangible property held by the partnership. Regulations will be forthcoming to prevent avoidance and provide guidance on treatment of property that may be held temporarily or transferred. 26

27

28 Section 4: Calculating GILTI GILTI is, with respect to any US shareholder for any tax year of the US shareholder, the excess (if any) of: (A) The shareholder s net CFC tested income for the tax year, over (B) The shareholder s net deemed tangible income return for the tax year 28

29 Section 4: Calculating GILTI Net CFC tested income GILTI is, with respect to any US shareholder for any tax year of the US shareholder, the excess (if any) of: (A) The shareholder s net CFC tested income for the tax year, over (B) The shareholder s net deemed tangible income return for the tax year Net CFC tested income is, with respect to any US shareholder for any tax year of the US shareholder, the excess (if any) of: (A) The aggregate of the shareholder s pro rata share of the tested income of each CFC with respect to which the shareholder is a US shareholder for the tax year of the US shareholder (determined for each tax year of the CFC which ends in or with that tax year of the US shareholder), over (B) The aggregate of the shareholder s pro rata share of the tested loss of each CFC with respect to which the shareholder is a US shareholder for the tax year of the US shareholder (determined for each tax year of the CFC which ends in or with that tax year of the US shareholder) 29

30 Section 4: Calculating GILTI tested income The tested income is, with respect to any CFC for any tax year of the CFC: The gross income of the corporation Less: Effectively Connected Income (i.e. any item of income described in 952(b) Less: Gross income of Subpart F Less: Gross income excluded due to exception for high foreign taxes ( Sec 954(b)(4)) Less: Any dividend received from a related person (as defined in 954(d)(3)) Less: Any foreign oil and gas extraction income (as defined in 907(c)(1)) of the corporation. Less: Deductions (including taxes) properly allocable under 954(b)(5) 30

31 Section 4: Calculating GILTI Net Deemed Tangible Income Return GILTI is, with respect to any US shareholder for any tax year of the US shareholder, the excess (if any) of: (A) The shareholder s net CFC tested income for the tax year, over (B) The shareholder s net deemed tangible income return for the tax year The net deemed tangible income return is, with respect to any US shareholder for any tax year, the excess of: (A) 10% of the aggregate of the shareholder s pro rata share of the qualified business asset investment of each CFC with respect to which the shareholder is a US shareholder for the tax year over (B) The amount of interest expense taken into account in determining the shareholder s net CFC tested income for the tax year to the extent the interest income attributable to the expense is not taken into account in determining the shareholder s net CFC tested income 31

32 Section 4: Calculating GILTI Example CFC 1 CFC 2 CFC 3 Net CFC Tested Income Gross Income 10,000,000 8,500,000 10,000,000 Less: Deductions allocable to gross income under 954(b)(5) (6,000,000) (10,000,000) (7,000,000) 4,000,000 (1,500,000) 3,000,000 Ownership % 100% 100% 100% 4,000,000 (1,500,000) 3,000,000 Net Tested Income 5,500,000 Net Deemed Tangible Income Return Qualified Business Asset Investment: Average qtrly Average qtrly Average qtrly Specified Tangible Property 20,000,000 35,000,000 40,000,000 Pro rata share of tangible property from a partnership ,000,000 35,000,000 40,000,000 Ownership % 100% 100% 100% 20,000,000 35,000,000 40,000,000 Applicable % 10% 10% 10% 2,000,000 3,500,000 4,000,000 Interest expense taken into account in determining the shareholder's net CFC tested income for the tax year to the extent the interest income attributable to the expense is not taken into account in determining the shareholder's net CFC tested income (100,000) (100,000) (100,000) 1,900,000-3,900,000 Net deemed tangible income return 5,800,000 $ (300,000) 32

33 Section 4: Calculating GILTI Example CFC 1 CFC 2 CFC 3 Net CFC Tested Income Gross Income 10,000,000 8,500,000 10,000,000 Less: Deductions allocable to gross income under 954(b)(5) (6,000,000) (10,000,000) (3,000,000) 4,000,000 (1,500,000) 7,000,000 Ownership % 100% 100% 100% 4,000,000 (1,500,000) 7,000,000 Net Tested Income 9,500,000 Net Deemed Tangible Income Return Qualified Business Asset Investment: Average qtrly Average qtrly Average qtrly Specified Tangible Property 20,000,000 35,000,000 40,000,000 Pro rata share of tangible property from a partnership ,000,000 35,000,000 40,000,000 Ownership % 100% 100% 100% 20,000,000 35,000,000 40,000,000 Applicable % 10% 10% 10% 2,000,000 3,500,000 4,000,000 Interest expense taken into account in determining the shareholder's net CFC tested income for the tax year to the extent the interest income attributable to the expense is not taken into account in determining the shareholder's net CFC tested income (100,000) (100,000) (100,000) 1,900,000-3,900,000 Net deemed tangible income return 5,800,000 GILTI Income $ 3,700,000 33

34 Section 4: Calculating GILTI 80% Deemed Paid Foreign Tax Credit If any amount is includible in the gross income of a domestic corporation as GILTI, that domestic corporation is deemed to have paid foreign income taxes equal to 80% of the product of (i) the domestic corporation s inclusion percentage multiplied by (ii) the aggregate tested foreign income taxes paid or accrued by CFCs. The inclusion percentage is, the ratio of: (A) The corporation s GILTI, divided by (B) The aggregate amount of the domestic corporation s pro rata share of each CFC s tested income with respect to the corporation The tested foreign income taxes are the foreign income taxes paid or accrued by the foreign corporation which are properly attributable to the tested income of the foreign corporation taken into account by the domestic corporation under 951A. 34

35 Section 4: Calculating GILTI 80% Deemed Paid Foreign Tax Credit The taxes deemed to have been paid are treated as an increase in GILTI for purposes of 78. A separate foreign tax credit basket is used for GILTI. No carryback or carryforward for taxes paid or accrued with respect to amounts in the GILTI basket 35

36 Section 4: Calculating GILTI Deduction for GILTI A domestic corporation is allowed a deduction in an amount equal to the sum of: 50% of (i) the global intangible low-taxed income (GILTI) amount which is include in the gross income of the domestic corporation under 951A for the tax year, and (ii) the amount treated as a dividend received by the corporation under 78 which is attributable to the amount described in item (i). Applicable percentage for GILTI deduction will decrease from 50% to 37.5% after December 31,

37 Section 5: Planning opportunities to minimize tax impact of foreign intangible holdings - Check-the-Box Election Eligible entities can change their classification from a corporation to a partnership or disregarded entity for tax purposes or vice-versa. Could change a foreign corporation s status from a CFC to a foreign partnership or foreign disregarded entity, thus no longer subject to GILTI. As a result, all income from the foreign entity flows through to the owner(s), and therefore could be subject to US taxation each year, but taxes paid or accrued become creditable (such credit is unavailable under GILTI unless US Shareholder is a C-Corporation). However, if election is effective after 12/31/2017, unrealized appreciation of CFC is considered additional Earnings and Profits on deemed liquidation, causing one-time GILTI charge which could be high. Other foreign inbound / outbound rules need to be assessed. Possible addition tax on liquidation to US Shareholder. Lots of items to consider. As always, consult with a tax advisor. Election is completed on Form 8832 and generally must be made no later than 75 days after it is to be effective. 37

38 Section 5: Planning opportunities to minimize tax impact of foreign intangible holdings - Section 338(g) Elections These elections are generally available for corporate acquirers of foreign corporations. Turns a stock acquisition into a deemed asset deal. End result is generally additional basis in tangible and intangible property in CFC for earnings and profits purposes, thus increasing Net Deemed Tangible Income Return in GILTI calculation, and reducing tested income for GILTI calculation purposes as a result of additional depreciation and amortization. 38

39 Section 5: Planning opportunities to minimize tax impact of foreign intangible holdings - Section 962 Election Annual election available to US Shareholders who are individuals. Generally treats the individual as a domestic C-Corporation for purposes of: Applying tax rates on income taxable under Section 951(a)(1) Subpart F and GILTI Applying provisions of Section 960 relating to Foreign Tax Credit allows an individual to claim credit on taxes paid or accrued by the CFC, not otherwise available to individuals 39

40 Unknowns Proposed rules regarding the inclusion of global intangible low-taxed income (GILTI) by United States shareholders under section 951A planned for September Reporting requirements for individuals, corporations, partnership and s-corporation K-1s. State taxation 40

41 Disclaimer Questions? This documentation contains general information, may be based on authorities subject to change, and is not a substitute for professional advice or services. This document does not constitute tax, consulting, business, financial, investment, legal or other professional advice, and you should consult a qualified professional advisor before taking any action based on the information herein. Freed Maxick, its affiliates and related entities are not responsible for any loss resulting from or relating to reliance on this information by any person. 41