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Tax Considerations of I.P. When Expanding a Business Offshore

Tax Considerations of I.P. When Expanding a Business Offshore

If a client asks a U.S. tax adviser about the U.S. tax cost of contributing intangible property (“I.P.”) to a foreign corporation for use in an active business, the response can be a dizzying array of bad tax consequences beginning with a deemed sale in a transaction that results in an ongoing income stream. While that is a correct answer, it need not be the only answer. Elizabeth V. Zanet and Stanley C. Ruchelman explore alternatives to a capital contribution of I.P. to a foreign corporation, including (i) the use of a foreign hybrid entity and (ii) licensing the I.P. to a foreign entity in order to benefit from the F.D.I.I. tax deduction. Each alternative may provide interesting tax results, but attention to detail will be required.

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Tax Basics of Intellectual Property

Published in Landslide Volume 10 Issue 6, © 2018 by the American Bar Association.

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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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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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I.R.S. Announces Six Compliance Campaign

I.R.S. Announces Six Compliance Campaign

The I.R.S. Large Business and International division ("LB&I") recently announced compliance campaigns that are principally directed at compliance in cross-border fact patterns.  Included are campaigns to address (i) non-compliance with respect to Form 3520, (ii) compliance issues related to Form 1042, (iii) nonresident, non-citizen individuals inappropriately claiming tax treaty exemptions, (iv) nonresident, non-citizen individuals inappropriately claiming itemized deductions on tax returns, and (v) inappropriate credits claimed by nonresident, non-citizen individuals. Elizabeth V. Zanet looks into the various campaigns and places into context the effect on individuals.

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