International Tax Law FAQ

March 26, 2014
Possible for a Domestic Trust to Become a Foreign Trust?

Possible for a Domestic Trust to Become a Foreign Trust?

In a word, “yes”—it is possible for a domestic trust inadvertently to become a foreign trust. This is significant because that means different tax rules apply, […]
March 25, 2014
Basic Tax Rules for Passive Foreign Investment Companies

Basic Tax Rules for Passive Foreign Investment Companies

The rules governing Passive Foreign Investment Companies (“PFICs”) are a bit similar to the rules for CFCs. Shareholders of a PFIC are subject to the undistributed […]
March 25, 2014
What is the “Deemed Paid” Foreign Tax Credit?

What is the “Deemed Paid” Foreign Tax Credit?

Typically, to receive the FTC, the U.S. taxpayer must have actually paid the foreign tax. But there is an exception to this rule. If a U.S. […]
March 25, 2014
What is the Foreign Tax Credit (FTC)?

What is the Foreign Tax Credit (FTC)?

The foreign tax credit’s purpose is to reduce the double tax burden that would otherwise arise when foreign source income is taxed by both the U.S. […]
March 25, 2014
Subpart F Income Requires Separate Computations

Subpart F Income Requires Separate Computations

The different categories of Subpart F income must be computed separately. U.S. shareholders of a CFC are restricted in how they compute their income and losses. […]
March 25, 2014
Investing in Controlled Foreign Corporation

Investing in Controlled Foreign Corporation

Most likely. U.S. Shareholders of CFCs are typically taxed on their pro rata share of CFC profit. Wholly apart from Subpart F income, U.S. Shareholders of […]