The Resource The hidden complexitites of the code sec. 245A holding period requirement

The hidden complexitites of the code sec. 245A holding period requirement

Label
The hidden complexitites of the code sec. 245A holding period requirement
Title
The hidden complexitites of the code sec. 245A holding period requirement
Creator
Subject
Language
eng
Summary
In late 2017, Congress passed the Tax Cuts and Jobs Act (TCJA) which dramatically altered the United States' international tax system. As part of this overhaul, Congress enacted Code Sec. 245A which provides domestic corporations with a deduction equal to the foreign-source portion of dividends received from certain foreign corporations. The effect of this change is to create a 100-percent dividends received deduction (DRD) for domestic corporations with respect to foreign earnings of its non-U.S. subsidiaries. As a limitation on a taxpayer's ability to take the deduction, Congress also devised a new holding period standard specific to corporations claiming a Code Sec. 245A DRD. As described in greater detail in this article, this new U.S. shareholder holding period is novel in its approach, making reference to previously unrelated relationships defined elsewhere in the Code. As a result, the holding period for a Code Sec. 245A DRD creates unique issues and challenges. This article explores this new standard, especially where the corporate shareholder attempting to claim the DRD holds the stock of the distributing corporation with a so-called tacked holding period. This article first describes the historic rules for corporations to claim other DRDs, including the impact that tacking has on this analysis. The article then describes the new holding period requirements necessary for a corporation to claim a DRD under Code Sec. 245A, providing alternate approaches of how these rules could be applied when there has been a change in shareholders
Citation source
In: International tax journal. - Riverwoods. - Vol. 44 (2018), no. 5 (September-October) ; p. 41-48
http://library.link/vocab/creatorName
Carey, K.H
Geographic coverage
North America
Language note
English
http://library.link/vocab/subjectName
  • holding period
  • tax system
  • dividends received deduction
  • shareholder
Label
The hidden complexitites of the code sec. 245A holding period requirement
Instantiates
Publication
Label
The hidden complexitites of the code sec. 245A holding period requirement
Publication

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