IRS releases draft instructions for forms K-2 and K-3

On June 29, 2021, the IRS released draft instructions of forms K-2 and K-3, after receiving feedback on the initial instructions that were released in July 2020. These new draft instructions may be found here https://www.irs.gov/pub/irs-dft/i1065s23–dft.pdf. The new forms will be effective for the 2021 tax year. Don’t miss: What are duty free zones? Forms …

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What are duty free zones?

If you’ve caught a flight in an international airport, you’ve likely seen shops in the airport marketing that they are “Duty Free Zones”. While most people may assume this means that goods purchased there are free from some type of tax, have you ever stopped to wonder what a duty is, and why these shops …

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Changes to 2020 form 5471- US owners of foreign corporations

The IRS released the draft form 5471 and instructions for 2020, which show a myriad of updates to the form. Don’t miss: Gift tax FAQs New Categories Categories 1 and 5 have been expanded to 1a, 1b, 1c, 5a, 5b and 5c in order to separate those filers who are under some relief and may …

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New law bans anonymous shell companies

Part of the newly passed National Defense Authorization Act, known as the Corporate Transparency Act, includes a ban on anonymous shell companies in the United States. Historically, the U.S. has been one of the top countries for criminals seeking financial secrecy and hiding large amounts of money. This new law attempts to close loopholes and …

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Final regulations on the foreign tax credit

The IRS has issued final regulations pertaining to the foreign tax credit, which incorporates changes due to the Tax Cuts and Jobs Act (TCJA). The new regulations may be found here. The TCJA had a major overhaul in the way U.S. taxpayers doing business overseas are taxed. As such, the foreign tax credit, which is …

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So, I left for a wedding in France…

You know that saying “the grass isn’t always greener on the other side”? Debra Callicutt, our International Tax Partner, and I were talking before she left for a recent wedding in France. First, she was stressed about leaving because she has so many Forms 5471 to review before the September 15 tax deadline. But, goodness, …

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Digital tax coming to a tech company near you… possibly

Take a second and look up from your phone. What do you see?… If I had to guess, it would be other people looking down at their phones. If that doesn’t scream digital economy, I don’t know what does. The global market is growing and becoming more and more complex. Companies are reaching out and …

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Transition tax penalty relief, Section 965 update

In a new press release on June 4, 2018, the IRS announced its decision to provide penalty relief to certain taxpayers who were delinquent in making a tax payment for the new transition tax. Section 965 of the code, also known as the transition tax, is a one-time tax on the accumulated earnings held in …

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If you’re not feeling GILTI, you may be soon enough

Have you felt “GILTI” about deferring taxes in your International investment or business?… Probably not, because that may have been one of the many reasons you set up that international company. If you’re not feeling GILTI about it (which you shouldn’t), you may be feeling it, in a financial way, come 2018 tax time! “GILTI” …

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