Discussion Topic 1: The Tax Cuts and Jobs Act of 2017 substantially changed how the United States taxes foreign subsidiary operation of United States companies by establishing a participation exemption system for taxing non-Subpart F foreign-source income that a domestic corporation earns through a foreign corporation. How are dividend distributions made after January 1, 2018 treated? How does this create a quasi-territorial system for domestic corporations?
Discussion Topic 2: The reforms enacted by the Tax Cuts and Jobs Act of 2017 had a significant impact on the Subpart F provisions. Starting in 2018, how are foreign-source dividends that a domestic corporation receives from a 10%-or-more-owned foreign corporation taxed? What are the provisions related to paying the “transition tax” referenced under the new law?
Discussion topic -1
The TCJA moved towards a “territorial” tax system by eliminating the additional U.S. tax on foreign profits through what is called a “participation exemption.” Under the U.S. participation exemption, foreign profits paid to U.S. parent corporations in the form of dividends are fully deductible against taxable income.[7] The result is that these foreign profits do not face additional U.S. taxation as they did under previous law.
For corporations to qualify for the participation exemption on their foreign profits, they need to satisfy three general requirements. First, the U.S. corporation must own 10 percent of the vote or value of the controlled foreign corporation’s (CFC) stock. Second, the U.S. parent corporation must satisfy a holding period requirement of 366 days. Lastly, the U.S. corporation cannot deduct a dividend against U.S. taxable income if that dividend received a tax benefit in a foreign country
Discussion topic-2
The Act introduced some new concepts that are aimed at encouraging the repatriation of foreign earnings by U.S. taxpayers; stated differently, it removes an incentive for the overseas accumulation of such earnings.
The keystone provision is the DRD, which allows an exemption from U.S. taxation for certain foreign income by means of a 100% deduction for the foreign-source portion of dividends received from specified 10%-owned FCs by regular domestic C corporations that are U.S. Shareholders of those FCs.
In general, a “specified 10%-owned FC” is any FC with respect to which any domestic corporation is a U.S. Shareholder.
Section 965 was added to the Internal Revenue Code as part of the Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017, and requires US shareholders to pay a one-time transition tax on the untaxed foreign earnings of controlled foreign corporations and certain foreign corporations that have a US shareholder that is a domestic corporation. The transition tax imposes two different tax rates on post-1986 earnings and profits: (1) 15.5 percent on cash earnings and profits, and (2) 8 percent on noncash earnings and profits.
Discussion Topic 1: The Tax Cuts and Jobs Act of 2017 substantially changed how the United...
Discussion Topic 1: Why do income source rules play a more prominent role in the taxation of foreign persons? How does the potential for United States withholding contribute to this? Discussion Topic 2: The international tax law changes contained in the Tax Cuts and Jobs Act (TCJA) are the most sweeping since 1986. In what ways did these changes bring the United States closer to a territorial tax system than a credit system?
The Tax Cuts and Jobs Act, enacted December 22, 2017, contained many provisions that impact US corporations. Please select one corporation and summarize how this Act has or will effect the corporation. Review recent public information including press releases, articles, and SEC filings.
l LTE 2:41 PM Module 2 Discussion The 2017 Tax Cuts and Jobs Act ("TCJA") is the most significant overhaul to the Internal Revenue Code since 1986. You can get a brief overview of the TCJA here. Everything you'll be learning in this course is in accordance with the new laws that are effective beginning this tax year (2018); however, l'd like you to consider certain differences when compared to the prior law to get a better understanding of the...
"An Analysis of the Tax Cuts and Jobs Act of 2017 2-3 Pages 5 Primary sources Interesting and Informative Use quotes from thought leaders, properly referenced DO NOT CUT AND PASTE- USE YOUR OWN BRILLIANT WORDS Provide a reference page.
"An Analysis of the Tax Cuts and Jobs Act of 2017 2-3 Pages 5 Primary sources MLA or APA style Interesting and Informative Use quotes from thought leaders, properly referenced DO NOT CUT AND PASTE- USE YOUR OWN BRILLIANT WORDS Provide a reference page.
There has been discussion about whether the Tax Cuts and Jobs Act that took effect in 2018 will increase tax revenue. Tax revenue can be thought of an as average tax rate multiplied by taxable income. If the average tax rate falls while taxable income stays the same, tax revenue will fall. But what if the tax cuts increase taxable income? Both of the major schools of thought in macroeconomics (Keynesians and Neoclassicals) believe that tax cuts increase economic growth....
The Tax Cut and Jobs Act, 2017 The changes made by the Tax Cut and Jobs Act, 2017 to the tax provisions have changed tax rate for 2018 and people are getting a first hand experience of what it means to them. Go over the Act and address the questions below: What are the major changes made to the tax provisions by the Act? What impact is it likely to have on our GDP and government’s budget? How have the...
The Tax Cuts and Jobs Act of 2017 ("the Act") made substantial changes to both the standard deduction and many itemized deductions. Use internet tax resources to address the following questions. Look for reliable websites and blogs of the IRS and other government agencies, media outlets, businesses, tax professionals, academics, think tanks, and/or political outlets. Explain how the Act changed the standard deduction. Choose five categories of itemized deductions and describe in detail how the Act changed each deduction. In...
Discuss the economic impact of the Tax Cuts and Jobs act of 2017 on 1. US corporations 2. US economy 3. Other countries including tax havens
The United States Congress and Senate passed "The Tax Cut and Jobs Act of 2017". President Trump approved and signed the bill into law on December 20, 2017. Please pick two aspects of the bill and explain the expected result of those aspects of the new law.