International Tax News

Proposed Regs Would Tax S Corporation Income Otherwise Allocable to Nonresident Alien Owners of ESBTs

Proposed Regs Would Tax S Corporation Income Otherwise Allocable to Nonresident Alien Owners of ESBTs The IRS has issued proposed regs that would ensure that the income of an S corporation will continue to be subject to U.S. income tax even when a nonresident alien (NRA) is a deemed owner of a grantor trust that…

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IRS Issues Final Regs on Recognition and Deferral of Foreign Currency Gain or Loss

IRS Issues Final Regs on Recognition and Deferral of Foreign Currency Gain or Loss In May, the IRS issued final regs on the combinations and separations of qualified business units (QBUs) subject to Internal Revenue Code Section 987. The regs also address the recognition and deferral of foreign currency gain or loss with respect to…

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2018 Foreign Income/Housing Exclusions

2018 Foreign Income/Housing Exclusions: Residency/Presence Tests Waived for Several Countries In a recent Revenue Procedure, the IRS waived the residency and presence tests that apply for purposes of the foreign earned income and foreign housing cost exclusions under the tax code. Specifically, the waivers apply to certain U.S. individuals in the Democratic Republic of the…

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Offsetting Foreign Currency Option Transaction Had No Economic Substance

Offsetting Foreign Currency Option Transaction Had No Economic Substance The U.S. Court of Appeals for the Fifth Circuit recently handed down a decision in Tucker v. Comm., a case involving foreign currency options. In it, the appellate court affirmed the U.S. Tax Court’s position that a complex offsetting foreign currency option transaction had no economic…

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IRS Finalizes FATCA Regs on Requirements for Sponsoring Entities

IRS Finalizes FATCA Regs on Requirements for Sponsoring Entities The IRS recently issued final regulations under the Internal Revenue Code regarding the Foreign Account Tax Compliance Act (FATCA). The final regs provide compliance requirements and verification procedures for sponsoring entities of foreign financial institutions (FFIs) and certain nonfinancial foreign entities (NFFEs). They also explain the:…

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