GILTI Rules Particularly Onerous for Non-C Corporation CFC Shareholders

The recently enacted tax reform legislation significantly expanded the application of Subpart F, including by adding a new inclusion rule for CFC income, termed "global intangible low-taxed income" (GILTI). The GILTI rules apply higher tax rates to GILTI attributed to individuals and trust...

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Bibliographic Details
Published in:International Tax Journal 2018-01, Vol.44 (1), p.11-42
Main Authors: McGill, Sandra P, Karch, Gary C, Feeley, Kevin J, O'Banion, Susan E, Crouse, Justin G
Format: Article
Language:English
Subjects:
Business income
C corporations
Controlled foreign corporations
Corporate income taxes
Corporate taxes
Foreign source income
Foreign tax credits
Income taxes
Intangible assets
Investments
Laws, regulations and rules
Personal property
Stockholders
Tax basis
Tax legislation
Tax rates
Taxation
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Summary:The recently enacted tax reform legislation significantly expanded the application of Subpart F, including by adding a new inclusion rule for CFC income, termed "global intangible low-taxed income" (GILTI). The GILTI rules apply higher tax rates to GILTI attributed to individuals and trusts who own CFC stock (either directly or through LLCs or S corporations) than to C corporation shareholders. This article describes the difference and suggests steps individuals and trusts may take to defer or reduce the effect of the GILTI rules on individuals and trusts.
ISSN:0097-7314