Section 965 Repatriation (Currently Unavailable)

Author: Rita M. Ryan, Tonya S. James

The Section 965 repatriation provisions of the TCJA required U.S. shareholders of specified foreign corporations to report and pay a one-time transition tax on previously untaxed foreign income. This one-time repatriation tax was the initial step in the shift to a more territorial tax and posed immediate challenges for tax preparers and advisors with clients with offshore holdings as the provisions required reporting on 2017 tax filings.

This on-demand course will provide tax advisors with a practical guide on the deemed repatriation provisions of Section 965. The course will also address the calculation of the 965 inclusion and deduction, the reporting of the transition tax on 2017 and 2018 returns, the IRS’ final regulatory guidance, foreign tax credit calculations, and the guidance related to three specific areas of noncompliance: where a taxpayer incorrectly applies carryforward of overpayment credits under Sections 6654 and 6655; where a taxpayer fails to make a correct first installment payment under a 965(h) election; or where a taxpayer fails to timely make the 965(h) election.

Publication Date: June 2019

Designed For
Tax preparers and advisors with clients with offshore holdings as the provisions required reporting on 2017 tax filing.

Topics Covered

• What is Section 965?
• Section 965 Terms and Definition
• Section 965 Calculation
• 2017 and 2018 Filing Requirement
• Common Errors
• Frequently Asked Questions
• Fiscal Year Taxpayers
• Section 965 Regulations

Learning Objectives

• Identify deemed repatriation provisions of Section 965
• Recognize which 2017 Congressional Act added Section 965 to the IRC
• Identify the date when the final regulations with respect to Section 965 were released
• Identify the applicable tax rate for individuals for non-cash assets as it relates to Section 965
• Identify common errors on Form 5471
• Describe items with respect to the ordering rules, under the Proposed Regulation Section 1.965-2(b)
• Recognize which elections are revoked by paying the remaining Section 965 liability
• Describe Section 965 and the definitions
• Identify the date in which the 2018 FAQs were released with respect to Section 965
• Describe how many years a deferral is available with respect to Section 965
• Identify the applicable tax rate for Corporations for non-cash assets as it relates to Section 965
• Differentiate the allocation first made for both corporations and individuals
• Describe disallowed portion of the foreign tax credit
• Differentiate which partnership entity is precluded from making 962 elections
• Identify the annual information return of U.S. persons with respect to Foreign Corporations
• Recognize the installment paid in full date the IRS will waive the late-payment penalty, regarding installment underpayments
• Differentiate Section 965 elections applied only to DFICs owned by S Corporations

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None