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Treasury and IRS Release Final Regulations under Section 163(j) with respect to Partnerships and CFCs

On January 5th, the Department of the Treasury and the Internal Revenue Service released final 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 (ATI). The regulations finalize...

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 proposed regulations provide rules applicable to partnerships and controlled foreign...

Treasury and IRS Release Final Regulations under Section 451

On December 22, the Department of the Treasury and the Internal Revenue Service released final regulations under section 451(b) and (c). Section 451(b) generally provides that a taxpayer must recognize income no later than when the taxpayer takes the income into account on its applicable financial statement, and section 451(c) provides rules regarding the timing of the recognition of...

District Court Holds Section 965 Constitutional

On November 19, the U.S. District Court for the Western District of Washington held that the transition tax under section 965 was constitutional. Section 965, enacted by the Tax Cuts and Jobs Act, generally imposes a transition tax on a US shareholder’s pro rata share of the accumulated earnings and profits of certain foreign corporations. The court found that the transition tax was a...

Treasury and IRS Release Final Regulations under Section 245A and Section 951A Anti-Abuse Rules

On November 20, the Department of the Treasury and the Internal Revenue Service released final regulations under sections 245A and 951A. The rules coordinate two anti-abuse rules directed at certain transactions that occurred in 2018 between related controlled foreign corporations. The guidance generally finalizes proposed regulations issued in August 2020, except that the final...

Treasury and IRS Release Final and Proposed Foreign Tax Credit Regulations

On September 29, the Department of the Treasury and the Internal Revenue Service released final and proposed regulations that provide guidance with respect to the calculation of foreign tax credits. The final regulations address a variety of computational issues, such as the allocation and apportionment of deductions under sections 861 through 865, the allocation of apportionment of...

Treasury and IRS Release Final Regulations on Sales by Foreign Persons of Certain Partnership Interests

On September 21, the Department of the Treasury and the Internal Revenue Service released final regulations under section 864(c)(8). Section 864(c)(8) generally treats gain from the sale or exchange by a nonresident alien individual or foreign corporation of an interest in a partnership that is engaged in a trade or business in the United States as effectively connected with such trade...

Treasury and IRS Release Final Regulations on Full Expensing under Section 168(k)

On September 21, the Department of the Treasury and the Internal Revenue Service released final regulations under section 168(k). Amended by the Tax Cuts and Jobs Act, section 168(k) generally allows full expensing of certain depreciable property. The final regulations generally finalize proposed regulations released in 2019 that address the requirements to qualify for the additional...

Treasury and IRS Release Final and Proposed Regulations on Downward Attribution under Section 958(b)

On September 21, the Department of the Treasury and the Internal Revenue Service released final and proposed regulations addressing the repeal of section 958(b)(4) by the Tax Cuts and Jobs Act (TCJA). Prior to the TJCA, section 958(b)(4) provided that section 318(a)(3) (downward attribution) did not apply to treat a US person as owning stock owned by a person who is a not a US person....

Treasury and IRS Release Final BEAT Regulations

On September 1, the Department of the Treasury and the Internal Revenue Service released final regulations under section 59A. Section 59A imposes a base erosion and anti-abuse tax (or BEAT), which generally operates as a minimum tax on income without regard to certain deductible payments made to foreign related parties. The final regulations finalize proposed regulations that were...

Treasury and IRS Release Final and Proposed Regulations under Section 245A

On August 21, the Department of the Treasury and the Internal Revenue Service released proposed and final regulations under section 245A.  Section 245A allows a 100% deduction to a corporate US shareholder for the foreign-source portion of dividends received from a specified 10% owned foreign corporation (SFC). The final regulations limit the deduction for certain dividends received by...

OIRA Completes Review of Final and Proposed Regulations under Section 245A

On August 7, the Office of Information and Regulatory Affairs (OIRA) completed its review of regulations finalizing temporary regulations issued last June related to the 100% deduction available to a corporate US shareholder for the foreign-source portion of dividends received from a specified 10% owned foreign corporation (SFC) under section 245A and the look-through rule under...

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...

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....

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...


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