Eversheds Sutherland Tax Reform Law Blog
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Treasury and IRS Release Final and Proposed Regulations under Section 163(j)

On July 28, the Department of the Treasury and the Internal Revenue Service released final and proposed regulations under section 163(j). Amended by the Tax Cuts and Jobs Act (TCJA), section 163(j) generally limits a taxpayer’s interest deduction to the sum of its business interest income, floor plan financing interest, and 30% of its adjusted taxable income. The provision was further amended by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020 to allow taxpayers to deduct up to 50% of their adjusted taxable income (up from 30%), plus interest income and floor plan...
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IRS Issues Final and Proposed Regulations with Respect to the GILTI and Subpart F High-Tax Exclusions

On July 20, the IRS released final regulations that allow taxpayers to elect out of the global intangible low-taxed income (GILTI) provisions if the income is subject to a rate of at least 18.9% in a foreign country. Proposed regulations were also released that generally would revise the subpart F high-tax exception to be consistent with the provisions of the GILTI high-tax exception. Read More: Final Regulations Read More: Proposed...
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OIRA Completes Review of Final Regulations on the GILTI High-Tax Exclusion

On July 7, the Office of Information and Regulatory Affairs (OIRA) completed its review of final regulations under section 951A relating to the proposed high-tax exclusion for global intangible low-taxed income (GILTI) and its review of proposed regulations under section 954(b)(4) relating to high-tax subpart F income. Among other provisions, the proposed version of the regulations had generally offered taxpayers an election to exclude income from GILTI if the income was subject to a high rate of foreign tax. OIRA began its review of the regulations on June 16th. Read More: GILTI High-Tax...
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IRS Releases Final Regulations under Section 250

On July 9, the Internal Revenue Services issued final regulations under section 250. Section 250 provides a deduction for both foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI). The final regulations address the documentation and substantiation requirements with respect to the deduction under section 250. Read More: IRS Releases Final FDII, GILTI Deduction Regulations Read More: Final Regulations  Read More: Proposed Regulations...
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OMB Begins Review of Final Regulations Regarding the GILTI High-Tax Exclusion

On June 16, Treasury submitted final regulations with respect to the proposed high-tax exclusion for global intangible low-taxed income (GILTI) under section 951A, as well as proposed regulations under section 954(b)(4) relating to high-taxed subpart F income, to the Office of Management and Budget (OMB) for review. Among other items, the proposed version of the regulations offered taxpayers an election to exclude income subject to a high rate of foreign tax from GILTI under certain conditions. Read More: GILTI High-Tax Exclusions Regs Reach OIRA Read More: Proposed GILTI...
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OMB Begins Review of Proposed and Final Regulations Under Section 163(j)

On June 15, Treasury submitted final and proposed regulations to the Office of Management and Budget (OMB) for review. The IRS had indicated that the modifications to the regulations since OMB’s last review of the package reflect changes made to section 163(j) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Among other provisions, the CARES Act amended section 163(j) to allow taxpayers to deduct up to 50% of their adjusted taxable income (up from 30%), plus interest income and floor plan financing income, for taxable years beginning in either 2019 or 2020. Read More:...
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OIRA Completes Review of Final Regulations under Section 250

On June 12, the Office of Information and Regulatory Affairs (OIRA) completed its review of final regulations under section 250. Section 250 generally allows a domestic corporation a deduction for its foreign-derived intangible income (FDII) and its global intangible low-taxed income (GILTI) inclusion. The proposed regulations were published in the Federal Register on March 6, 2019. Read More: Final GILTI and FDII Regs Clear OIRA Review Read More: Proposed Regulations...
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IRS Releases Proposed Regulations on Like-Kind Exchanges

Today, the IRS released proposed regulations under section 1031, which provides nonrecognition treatment for certain like-kind exchanges of property. The Tax Cuts and Jobs Act (TCJA) limited the application of the provision to exchanges of real property. The proposed regulations would update the existing regulations under section 1031 to take into account the changes made to the section under the TCJA and provide a definition of “real property.” Read More: Proposed Regulations...
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OIRA Begins Review of Final Regulations under Section 250

The Office of Information and Regulatory Affairs (OIRA), part of the Office of Management and Budget, has begun its review of final regulations under section 250. Section 250 generally allows a domestic corporation a deduction for its foreign-derived intangible income (FDII) and its global intangible low-taxed income (GILTI) inclusion. The proposed regulations were published in the Federal Register on March 6, 2019. Read More: Final FDII, GILTI Deduction Regs Begin OIRA Review Read More: Proposed Regulations under Section 250...
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IRS Issues Guidance on CARES Act changes to Section 163(j)

The IRS has issued Rev. Proc. 2020-22 to provide guidance to taxpayers applying the provisions of section 163(j), as amended by the CARES Act. Among other provisions, the CARES Act amended section 163(j) to allow taxpayers to deduct up to 50% of their adjusted taxable income (up from 30%), plus interest income and floor plan financing income, for taxable years beginning in either 2019 or 2020. Rev. Proc. 2020-22 explains how taxpayers may elect to use the prior 30% limitation, rather than the new 50% limitation. Section 163(j) also allows farming and real property businesses to elect out of...
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Treasury and the IRS Release Proposed and Final Regulations under Section 245A(e) and 267A

On April 7th, the Department of Treasury and the Internal Revenue Service released final and proposed regulations regarding hybrid arrangements under sections 245A(e) and 267A. Section 245A(e) generally limits the participation exemption deduction under section 245A or causes a dividend received by a controlled foreign corporation (CFC) to be included in subpart F income if a dividend from a CFC is a hybrid dividend, and section 267A generally eliminates deductions for any “disqualified related party amount” paid or accrued through a related hybrid entity or transaction. The final...
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CARES Act Amends TCJA Provisions

On March 27, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. While the Act is primarily focused on the coronavirus epidemic, the Act made a few significant changes to provisions enacted by the Tax Cuts and Jobs Act (TCJA). The Act: • Allows net operating losses (NOLs) arising in 2018, 2019, or 2020 to be carried back five years and exempts NOLs from the 80% taxable income limitation for years beginning before 2021; • Amends section 163(j) to allow taxpayers to deduct up to 50% of their adjusted taxable income (up from 30%), plus interest income and floor plan...
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OMB Completes its Review of Proposed Regulations under Section 163(j)

The Office of Management and Budget (OMB) has completed its review of proposed regulations under section 163(j). Section 163(j) generally limits a taxpayer’s interest deduction to the sum of its business interest income, floor plan financing interest, and 30% of its adjusted taxable income. The IRS had previously stated that the proposed section 163(j) regulations would likely be released with final section 163(j) regulations by the end of March. The OMB completed its review of the final section 163(j) regulations in February. Read More: Interest Deduction Reg Packages Under Final Treasury...
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Treasury Intends to Finalize All Major TCJA Guidance by October 1

Speaking at a conference yesterday, Chip Harter, Treasury deputy assistant secretary for international tax affairs, stated that he is “fairly confident” that Treasury will be able to finalize all major guidance related to the Tax Cuts and Jobs Act by October 1st of this year. With respect to timing, Harter stated that he expects that regulations under section 901(m) will be released “any day now,” and that proposed and final anti-hybrid regulations will be released in the next couple of weeks. Additionally, Harter expects that proposed and final regulations under section 163(j) (limitation...
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OIRA Completes Its Review of Final 163(j) Regulations

On January 31, the Office of Management and Budget (OMB) completed its review of final regulations under section 163(j). Section 163(j) generally limits a taxpayer’s interest deduction to the sum of its business interest income, floor plan financing interest, and 30% of its adjusted taxable income. The IRS had previously stated that the final regulations would likely be released along with proposed regulations; however, the proposed regulations are not under review by OMB. Read More: Final Interest Regs Leave OIRA, No Sighting of Second...
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