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International Tax

COVID-19 Tax Relief for Nonresident Alien Individuals and U.S. Persons Living Abroad

Posted 7:30 PM by
The Internal Revenue Service (IRS) has provided guidance in Revenue Procedure 2020-20 related to nonresident alien individuals and their ability to claim a medical condition travel exception to the substantial presence test. This is critically important because the substantial presence test controls how nonresident aliens are taxed (as either a resident or nonresident of the United States) in many situations. Additionally, the IRS has provided guidance in Revenue Procedure 2020-27 to U.S. persons living abroad related to the physical presence test and the impact on the foreign earned income exclusion calculation.
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New Requirements for Tracking International Affiliates and Rental Real Estate: BE-10 Report

Posted 5:45 PM by
The rules related to BE-10 filing requirements have changed this year and will require additional people (“Reporters”) to complete this informational form. Every five years, the Bureau of Economic Analysis (BEA), part of the U.S. Department of Commerce, conducts a survey to analyze the extent of U.S. persons’ direct investment abroad. Specifically, this year’s filing change relates to U.S. persons that own foreign affiliates and/or foreign rental real estate being required to file, regardless of being notified.
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The CARES Act and Net Operating Losses: International Tax Considerations

Posted 12:25 PM by
On April 9, 2020, the Internal Revenue Service (IRS) issued Revenue Procedure 2020-24. The purpose of the Revenue Procedure is to provide guidance related to Section 172(b)(1)(D) of the Internal Revenue Code, which was created as a part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Specifically, Section 172(b)(1)(D) allows a carryback of any net operating loss (NOL) arising in a taxable year beginning after Dec. 31, 2017, and before Jan. 1, 2021, to each of the five years preceding the year in which the NOL was created. Taxpayers will carryback the relevant NOL to the earliest taxable year in the carryback period, carrying forward any unused amounts to each succeeding tax year.
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International Tax Updates in Response to the COVID-19 Emergency

Posted 5:15 PM by
It has been a tumultuous few weeks for the United States (and around the world) as we continue to deal with the ongoing COVID-19 emergency. There have been many questions from taxpayers who are wondering how to move forward, specifically regarding how and when to file their 2019 tax returns.
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Complying With the Often Misunderstood International Boycott Reporting Requirements

Posted 3:45 PM by
The Internal Revenue Code, while primarily used to generate tax revenue for the government, is often used to incentivize or penalize various U.S. policy decisions. Section 999 is one such section that is driven by broader U.S. policy goals.
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ICLEF Seminar: International Update: GILTI and Structure Considerations

Posted 3:45 PM by
Katherine Malarsky, director in KSM’s Tax Services Group, will examine new tax developments as they relate to international tax at the Indiana Continuing Legal Education Forum’s (ICLEF) “Practical Tax Law: Speed Dating with Taxes” seminar Dec. 10.
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Final GILTI Regulations Provide Some Relief to Taxpayers

Posted 1:15 PM by
The Tax Cuts and Jobs Act of 2017 added a new anti-deferral rule known as Global Intangible Low-Taxed Income (GILTI). The GILTI provisions impact taxpayers that own an interest in certain foreign corporations that are classified as controlled foreign corporations (CFC). Below is a brief background on the basic GILTI rules as well as highlights of significant developments in the final regulations that were issued in June 2019.
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Determining the Category of Filer for Form 5471 With Respect to Ownership of Foreign Corporations

Posted 5:30 PM by
The Tax Cuts and Jobs Act (“TCJA”) that was passed at the end of 2017 was meant to simplify the tax code. However, in the international tax realm, the complexity has only increased. This is certainly true of the revised form and instructions for Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, as of December 12, 2018 for the 2018 tax filing season. These revisions significantly change the form, and the instructions expand the categories of filers for this form.
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The Increased Importance of Income Sourcing in a Post-Tax Reform World

Posted 8:00 PM by
The Tax Cuts and Jobs Act of 2017 (TCJA), signed into law in late 2017, included significant changes to the tax environment in the United States. One of the largest changes was the addition of the qualified business income (QBI) deduction. The QBI deduction allows for a deduction of up to 20 percent of the qualified business income from partnerships, limited liability companies (LLCs), S corporations, trusts, estates, and sole proprietorships. Learn more about the QBI deduction.
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Malarsky to Speak on International Tax at ICLEF Seminar

Posted 3:00 PM by
Katherine Malarsky, director in KSM’s Tax Services Group, will discuss international tax reform at an Indiana Continuing Legal Education Forum (ICLEF) seminar on Dec. 11. The event, held at the ICLEF Conference Facility in Indianapolis, will educate non-tax attorneys of all backgrounds on tax law updates spurred by recent tax reform. The fast-paced seminar, worth three CLE credits, will feature nine different speakers giving 20-minute presentations.
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