Most transactions have their share of hiccups. Some cases are more serious than others.

Generally speaking, they originate with the seller. For example, due diligence turns up some disturbing information about the target company’s legal status, the target’s financials aren’t as rosy as the buyer was led to believe, the target’s owners keep trying to renegotiate the deal, or a … Continue Reading

It’s Not Easy

The owners of many closely held businesses recently filed federal income tax returns on which they claimed, for the first time, the deduction based on “qualified business income” under Section 199A of the Code; many others will be doing so in October of this year.[i]

Fortunately, these taxpayers and their advisers are able to rely upon … Continue Reading

We’ve all heard about the profits that publicly-held U.S. corporations have generated overseas, and how those profits have, until now, escaped U.S. income taxation by virtue of not having been repatriated to the U.S.

It should be noted, however, that many closely-held U.S. corporations are also actively engaged in business overseas, and they, too, have often benefited from such tax … Continue Reading

Ah, December

As we near the end of the taxable year ending December 31, 2017, the thoughts of most people turn to holidays and family gatherings, feasting and celebrations, and reflecting, perhaps, on another year gone-by.

Not so for tax professionals.

Instead of “visions of sugar plums” dancing in their heads, these poor folk dream of proposed legislation, obsess over … Continue Reading

Many of our clients, most of which are closely-held U.S. businesses, are looking to expand their operations overseas. Some are venturing into foreign markets on their own, while others are joint-venturing with established foreign businesses.

In structuring a joint venture, the parties will often form a foreign business entity that affords a significant degree of limited liability protection, such as … Continue Reading

Last week, we considered the U.S. taxation of a closely held foreign corporation that owned a minority interest in a partnership that was engaged in business in the U.S. This week, we turn our sights to the U.S. taxation of a domestic corporation that owned foreign corporate subsidiaries.

Policy Underlying the CFC Rules

In general, a U.S. person must … Continue Reading

Coming to America

Whether they are acquiring an interest in U.S. real property or in a U.S. operating company, foreigners seek to structure their U.S. investments in a tax-efficient manner, so as to reduce their U.S. income tax liability with respect to both the current profits generated by the investment and the gain realized on the disposition of the investment, … Continue Reading

Last week, we reviewed the various U.S. federal income tax consequences that may be visited upon a foreign person who owns and operates U.S. real property (“USRP”). Today we will consider the U.S. federal gift and estate tax consequences of which a foreign individual must be aware when investing in USRP.

Gift Tax

As you probably know, the gift tax … Continue Reading

Catching up? Start with Part I here.

Sale of USRP – FIRPTA

Aside from planning for the taxation of U.S.-sourced rental income, the foreigner must plan for the disposition of the USRP pursuant to a sale.

The taxation of gain realized by a foreigner on the sale of an interest in USRP is governed by FIRPTA (the “Foreign Investment … Continue Reading

Over the last few years, we have received an ever-increasing number of inquiries from “foreigners” who are interested in acquiring U.S. real property (“USRP”).

Some of these foreigners – meaning closely-held business organizations formed outside the U.S., and individuals who are neither U.S. citizens nor U.S. permanent residents – were acquiring USRP to be used in their U.S. business operations … Continue Reading