Many states and municipalities offer substantial economic incentives to corporate taxpayers to move to and invest in their areas. Central to those offers is the belief that these incentives are received tax free. However, owing to changes in the Tax Code under the Tax Cuts and Jobs Act, taxpayers must ensure that such incentives are carefully structured.
One of the more controversial and complex provisions of the Tax Cuts and Jobs Act has been the 21% excise tax on certain types of non-profit executive compensation. The Internal Revenue Service recently issued interim guidance that addresses how this tax will apply in various situations that commonly arise for tax-exempt employers. However, establishing internal systems to determine which employees are covered by this tax may prove challenging.
The Internal Revenue Service and the Department of the Treasury recently released proposed regulations that address the calculation of corporate US shareholders' deemed paid foreign tax credits under Section 960 of the Tax Act. The proposed regulations also clarify that certain foreign income taxes paid by controlled foreign corporations will be lost and that corporate US shareholders cannot claim a deemed paid credit with respect to such taxes.
The Department of the Treasury and the Internal Revenue Service recently released proposed regulations for the Base Erosion and Anti-abuse Tax (BEAT), which was added to the Internal Revenue Code as part of the Tax Act 2017. The proposed regulations provide helpful guidance on a range of important topics and generally go a long way towards a reasonable implementation of a very challenging statute.
US taxpayers are generally taxable on income earned worldwide, regardless of the manner in which that income is paid (eg, currency (foreign or domestic) or property (tangible, intangible or virtual)). Therefore, if cryptocurrency has been bought, sold or exchanged, those transactions could be subject to federal tax. If the cryptocurrency is held offshore, a number of offshore reporting obligations could also apply to these holdings.