HIDE

Other Publications

Insights

Publications

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.

Read More

Code §962 Election Offers Benefits Under U.S. Tax Reform

Code §962 Election Offers Benefits Under U.S. Tax Reform

Two provisions in the recent tax reform legislation – Code §§965 (transition tax) and 250 (50% deduction for G.I.L.T.I.) – focus on C.F.C.’s and their U.S. Shareholders.  In each case, corporate U.S. Shareholders are entitled to a deduction that is not granted to an individual with regard to income that is taxed under Subpart F.  However, Code §962 may allow an individual who is a U.S. Shareholder of a C.F.C. to elect to be taxed on the Subpart F Income as if a corporation.  This allows for tax at a lower rate and a foreign tax credit for corporate income taxes paid by the C.F.C.  Elizabeth V. Zanet and Galia Antebi explain the workings of Code §962 and focus on the position of naysayers who caution that it may not provide the relief it appears to provide.

Read More

Investing in U.S. Real Estate on a (Possibly) Tax-Free Basis

Investing in U.S. Real Estate on a (Possibly) Tax-Free Basis

A Real Estate Investment Trust, or R.E.I.T., is a popular type of investment vehicle.  A R.E.I.T. is an entity that generally owns and typically operates a pool of income-producing real estate properties, including mortgages.  Its investors generally look to a return on investment in two forms: (i) distributions from the R.E.I.T. and (ii) dispositions of the R.E.I.T. stock.  If certain facts exist, U.S. tax law offers foreign investors a completely tax-free avenue to invest in a R.E.I.T.  Galia Antebi and Neha Rastogi explain the ins and outs of tax-free treatment for the foreign investor.

Read More

B.E.A.T.-ing Base Erosion: U.S. Subjects Large Corporations to Anti-Abuse Tax

B.E.A.T.-ing Base Erosion: U.S. Subjects Large Corporations to Anti-Abuse Tax

Cross-border payments to related parties have been an arrow in the quiver of cross-border tax planners since the time that income tax and global trade first intersected.  The new Code §59A introduces the Base Erosion and Anti-Abuse Tax (“B.E.A.T.”) on large corporations that significantly reduce their U.S. tax liability through the use of cross-border payments to related persons.  It is structured as another form of the now-repealed corporate Alternative Minimum Tax rather than a disallowance of a deduction in computing regular taxable income.  Banks that have significant interest payments and U.S. companies that pay significant royalties for trademarks, copyrights, and know-how are the targets of the tax to the extent full 30% withholding tax is not imposed.  Galia Antebi and Sheryl Shah explain how the tax is computed.  Is this another step towards a global trade war?

Read More

Reform of the U.S. Tax Regime – The Swiss Perspective

Published by Prager Dreifuss, Tax Newsletter (February 2018).

Read More