Yes- You Can be Taxed at the Lower Federal C Corporation Rates on Foreign Source Income Without Incorporating or Being Subject to Two Layers of Tax

Yes- You Can be Taxed at the Lower Federal C Corporation Rates on Foreign Source Income Without Incorporating or Being Subject to Two Layers of Tax

Tax Law
By Anthony Diosdi Internal Revenue Code Section 962 allows a U.S. individual taxpayer that holds shares of a controlled foreign corporations (“CFC”) to elect to be taxed as a subchapter C corporation. This election is applicable to inclusions of subpart F income as defined under Internal Revenue Code Section 951(a) and Section 951A, the global intangible low-taxed income (“GILTI”) tax regime.In 1962, Congress enacted the subpart F provisions of the Internal Revenue Code. At the time subpart F was enacted, the highest individual tax bracket was 91 percent and the highest corporate rate was 52 percent. Concerned of the impact subpart F income will have on individual taxpayers, Congress provided individual taxpayers with a way to reduce their tax liability on subpart F income through Internal Revenue Code Section 962.…
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