Tag Archives: Foreign Source

IC-DISC Benefits Enhanced with Foreign Shareholders

Since the reduction in the individual tax rate on qualified dividends in 2004, the Interest Charge Domestic Sales Corporation (“IC-DISC”) has become an attractive vehicle to obtain a tax incentive for exporting U.S.-produced goods. For individual U.S. and foreign taxpayers, the use of an IC-DISC reduces tax liability by converting a portion of the export … Continue Reading

Synthetic Investment in U.S. Real Estate by Foreign Investors

According to recent reports, foreign investment in commercial U.S. real estate exceeded $38.7 billion in 2013 – a 40 percent increase over 2012. Leading the way in 2013 were investors from Canada, China, Australia, Germany, and Singapore. This represents a dramatic increase from the 2009 collapse of the U.S. real estate markets, which caused foreign investments … Continue Reading

Retroactive Tax Planning

Converting Subpart F Income into Qualified Dividends U.S. shareholders of foreign corporations are generally not subject to tax on the earnings of such corporations until the earnings are repatriated to the shareholders in the form of a dividend.  Moreover, when a foreign corporation is resident in a jurisdiction with which the United States has a … Continue Reading

Tax Planning for the Privatization of the Space Industry

The privatization of the space industry has seen dramatic growth in recent years, and it appears that more significant developments are on the horizon. During 2013, SpaceX (the space exploration company founded by Elon Musk, co-founder of PayPal and Tesla Motors) successfully launched a major communications satellite into orbit for a private satellite operator, and became … Continue Reading

Determining Foreigners Insolvency Exception

Can a foreign person exclude foreign-situs assets in determining insolvency exception to cancellation of indebtedness income? With the worldwide global default rate on corporate debt continuing to rise, a taxpayer’s ability to exclude cancellation of indebtedness income from gross income has become increasingly relevant.  This remains true for foreign persons who are also subject to … Continue Reading

The High-Tax Exception and Malta’s Refund System

A Match Made in Heaven U.S. shareholders of foreign corporations are generally not subject to U.S. federal income tax on the earnings of such corporations until those earnings are repatriated to the shareholders in the form of a dividend.  Where a foreign corporation is classified as a “controlled foreign corporation” (“CFC”), however, its “United States … Continue Reading

Foreign Investment in the U.S. Through Romania Just Became More Interesting

All “modern” income tax treaties concluded by the United States contain a “Limitation on Benefits” (LOB) provision.  The purpose of such a provision is to prevent “treaty shopping.” Romania is one of the few remaining countries that have comprehensive income tax treaties with the United States that do not contain LOB provisions. Romania recently enacted … Continue Reading
LexBlog