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A New Tax Regime for CFCs: Who Is GILTI?

Published by the Civil Research Institute in the Journal of Taxation and Regulation of Financial Institutions, vol. 31, no. 03 (Spring 2018): pp. 17-28.

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Have You Inherited a P.F.I.C.? – What it Means to Be a U.S. Beneficiary

Have You Inherited a P.F.I.C.? – What it Means to Be a U.S. Beneficiary

In today’s global environment, it is not surprising to find that a beneficiary of a foreign estate or trust is living in the U.S. An interest in a foreign trust can be problematic for the beneficiary if the foreign trust invests through a foreign “blocker” corporation that holds passive assets (such as publicly traded stocks and securities) or a foreign mutual fund. These companies can stumble into P.F.I.C. categorization for U.S. tax purposes, which yields sub-optimal tax consequences for the U.S. beneficiary. Rusudan Shervashidze and Nina Krauthamer break down the U.S. tax rules that make a foreign corporation a P.F.I.C., the various ways in which a U.S. investor in a P.F.I.C. will be taxed, and the reporting obligations that are imposed on the U.S. investor in a P.F.I.C.

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Blockchain 101

Blockchain 101

Blockchain has been in the spotlight since early 2017, mostly due to the 2017 surge in cryptocurrency values and the rise of initial coin offerings (“I.C.O.’s”). Many legal advisors have clients who use or wish to use blockchain in their businesses, and yet, the actual technology is often not discussed in the legal field. In a series of Q&A’s, Fanny Karaman and Galia Antebi explain the rationale behind blockchain technology and reasons for its reliability. Because blockchain is a decentralized system with inherent proof of work built into the program, it can eliminate the need for intermediaries, such as banks, lawyers, and brokers. Advisers should be aware of the benefits of the technology, as well as its potential for disrupting the legal landscape.

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Insights Vol. 5 No. 6: Updates & Other Tidbits

Insights Vol. 5 No. 6: Updates & Other Tidbits

This month, Neha Rastogi and Nina Krauthamer look at several interesting updates and tidbits, including (i) an I.R.S. notice that addresses legislative workarounds to limitations on deductions for state and local tax payments effective in 2018, (ii) new rules under Code §83(i), which allow a qualified employee to defer income attributable to stock received in connection with the exercise of an option or the settlement of a restricted stock unit (“R.S.U.”), and (iii) a call for guidance regarding cryptocurrency accounting.

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Inbound Acquisition Due Diligence Under U.S. Tax Reform

Inbound Acquisition Due Diligence Under U.S. Tax Reform

M&A transactions have accelerated as the U.S. economy reacts to the adoption of favorable rules under the Tax Cuts & Jobs Act. But, as mentioned in “Coming to the U.S. After Tax Reform,” an article by Jeanne Goulet in this edition of Insights, many adverse sleeper provisions have also been introduced. For those tax advisers assigned due diligence tasks in advance of an M&A transaction, several additional pages have been added to the D.D. Checklist. Elizabeth V. Zanet and Beate Erwin address the new exposure areas that must be identified by the D.D. team.

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