Entity Planning Post 2017 Tax Cuts and Jobs Act for Doing Business Outside the United States
By Anthony Diosdi The Tax Cuts and Jobs Act of 2017 dramatically changed the way U.S. businesses plan outbound foreign investments. This article will compare and contrast the different entities available for outbound tax planning. Prior to the enactment of the 2017 Tax Cuts and Jobs Act, U.S. taxpayers had two main entity choices when engaging in outbound foreign tax planning: flow through structures (i.e., disregarded entities or partnerships) and corporate structures. Each had its relative costs and benefits.A. Tax Entities Used in Outbound Foreign Tax Planning Prior to the Enactment of the 2017 Tax Cuts and Jobs Act1. Flow Through EntitiesIndividuals that utilized flow through entities in outbound tax planning were subject to one layer of taxation. The flow through entities provided for one level of tax at a…