Instructor for this course
more

As a boutique international tax advisory firm, we’re finding international tax issues arising for individuals and companies of all sizes. Many of them never thought they’d have any cross-border activities. We thought it might be helpful to do a series of discussions on International Tax for the Non-Specialist. They are overviews designed to assist practitioners and taxpayers identify issues. The overviews dive into some level of detail, but we envision separate sessions to more fully explain various technicalities.

  1. There is no need to view the presentations in any particular order. This discussion is #5 in the series, following:
  2. On tax residency and foreign financial account disclosures [FBAR / FinCen 114 / Form 8938];
  3. On earning foreign income and an employee being transferred to a foreign affiliate [including the foreign earned income and housing exclusions];
  4. On the anti-deferral rules of Subpart F and identifying a controlled foreign corporation (CFC); and
  5. On US income taxation of Nonresidents.

This particular presentation focuses on Internal Revenue Code §956, Investment of Earnings in US Property. To ensure all viewers have at least the same minimal level of background, the presentation briefly reviews the general CFC / US Shareholder rules and various types of income and investments Congress considers “tainted” and therefore deemed distributed to the US owners. This includes, but is not limited to:

  • Types of US investments by a CFC that are / are not tainted.
  • Common real life examples of unintentionally falling into §956, including how something as simple as borrowing funds from a US bank could cause problems.
  • Examples to help you calculate and understand the tax impact.
  • An overview of PTEP (previously taxed E&P).
  • Discussion of a subsequent cash distribution.

 

Course Key Concept: International tax, Global tax, Resident Alien, Controlled foreign corporation, CFC, US Shareholder, Subpart F, Anti-deferral, Section 951, Section 956, Section 957, Deemed dividend, TCJA, US person, E&P, Earnings and profits, PTEP / PTI, Previously tax income, Previously taxed E&P.

Course Series

This course is included in the following series:

7 CoursesPractical International Tax for the Non-Specialist

  1. Practical International Tax for the Non-Specialist #1: Tax Residency and Foreign Financial Account Disclosures
  2. Practical International Tax for the Non-Specialist #2: Case Study - US Person Earning Foreign Income and then Transferred to Foreign Subsidiary.
  3. Practical International Tax for the Non-Specialist #3: Anti-deferral overview– Subpart F and CFCs.
  4. Practical International Tax for the Non-Specialist #4: US Taxation of Nonresident Individuals
  5. Practical International Tax for the Non-Specialist #5: Section 956, Investment of Earnings in US Property
  6. Practical International Tax for the Non-Specialist #6: Check The Box Overview (Entity Classification Election)
  7. Practical International Tax for the Non-Specialist #7: Foreign Investment in US Real Property - FIRPTA

Learning Objectives

  • Explore the anti-deferral rules and identify the policy behind the rules.
  • Identify the policy behind §956.
  • Discover how §956 impacts US taxation.
  • Recognize a transaction that triggers §956 and learn how to calculate relevant income.
Last updated/reviewed: July 03, 2020

Prerequisites

Course Complexity: Intermediate

No advanced preparation or prerequisites are required for this course. However it is recommended to take other Tax courses by Marc Schwartz: Practical International Tax for the Non-Specialist

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  4:46Introduction to Section 956, Investment of Earnings in US Property
  15:32Section 956, Investment of Earnings in US Property - Part 1
  12:52Section 956, Investment of Earnings in US Property - Part 2
  6:56Section 956, Investment of Earnings in US Property - Part 3
  10:58Section 956, Investment of Earnings in US Property - Part 4
CONTINUOUS PLAY
  51:02Practical International Tax for the Non-Specialist #5: Section 956, Investment of Earnings in US Property
SUPPORTING MATERIAL
  PDFSlides: Practical International Tax for the Non-Specialist #5: Section 956, Investment of Earnings in US Property
  PDFPractical International Tax for the Non-Specialist #5: Section 956, Investment of Earnings in US Property Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM