Relief on Way to U.S. Individuals Owning Stock in Controlled Foreign Corporations

Tax Attorneys William Sherman and Seth Entin co-authored an article that provides a summary on the relief provided to U.S. individuals who own stock in controlled foreign corporations (CFC). On March 4, the U.S. Department of Treasury released its proposed regulations dealing with the application of recent U.S. tax reform involving CFCs. Previously, U.S. shareholders could defer U.S. tax on the foreign income earned by the CFC, but under the Tax Cuts and Jobs Act (TCJA) a U.S. shareholder of a CFC is taxed on the global intangible low-taxed income (GILTI).

Mr. Sherman and Mr. Entin discuss how making an election under Section 962 of the Internal Revenue Code allows individuals to be taxed similar to a U.S. corporation.

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