and Treasury issue proposed implementing Section 965

IR-2018-158, August 1, 2018

IR-2018-158, August 1, 2018

WASHINGTON−The Internal Revenue Service and the Department of the Treasury today issued proposed regulations on section 965 of the Internal Revenue Code. The proposed affect United States shareholders, as defined under section 951(b) of the Code, with direct or indirect ownership in certain specified foreign corporations, as defined under section 965(e) of the Code.

WASHINGTON−The Internal Revenue Service and the Department of the Treasury today issued proposed regulations on section 965 of the Internal Revenue Code. The proposed affect United States shareholders, as defined under section 951(b) of the Code, with direct or indirect ownership in certain specified foreign corporations, as defined under section 965(e) of the Code.

Section 965, enacted in December 2017, levies a transition on -1986 uned foreign earnings of specified foreign corporations owned by United States shareholders by deeming those earnings to be repatriated.  For domestic corporations, foreign earnings held in the form of cash and cash equalents are generally intended to be ed at a 15.5 percent rate for 2017 calendar , and the remaining earnings are intended to be ed at an 8 percent rate for 2017 calendar .

Section 965, enacted in December 2017, levies a transition on -1986 uned foreign earnings of specified foreign corporations owned by United States shareholders by deeming those earnings to be repatriated.  For domestic corporations, foreign earnings held in the form of cash and cash equalents are generally intended to be ed at a 15.5 percent rate for 2017 calendar , and the remaining earnings are intended to be ed at an 8 percent rate for 2017 calendar .

The lower effecte rates applic to section 965 income inclusions are achieved by way of a participation deduction set out in section 965(c) of the Code.  A uced foreign cit also applies with to the inclusion under section 965(g) of the Code.  payers may generally elect to pay the transition in installments over an eight-year period under section 965(h) of the Code. The proposed contain detailed information on the calculation and reporting of a United States shareholder’s section 965(a) inclusion amount, as well as information for making the elections avail to payers under section 965.

The lower effecte rates applic to section 965 income inclusions are achieved by way of a participation deduction set out in section 965(c) of the Code.  A uced foreign cit also applies with to the inclusion under section 965(g) of the Code.  payers may generally elect to pay the transition in installments over an eight-year period under section 965(h) of the Code. The proposed contain detailed information on the calculation and reporting of a United States shareholder’s section 965(a) inclusion amount, as well as information for making the elections avail to payers under section 965.

Written or electronic comments and requests for a public hearing on this proposed regulation must be receed within 60 days of publication in the Federal Register.

Written or electronic comments and requests for a public hearing on this proposed regulation must be receed within 60 days of publication in the Federal Register.

More information regarding the Cuts and Jobs Act, as well as Section 965, can be found at the Tax Reform on .gov.
 

More information regarding the Cuts and Jobs Act, as well as Section 965, can be found at the Tax Reform on .gov.
 


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