A Walk-Through Form 8992-U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (“GILTI”)
By Anthony Diosdi IntroductionUnder the 2017 Tax Cuts and Jobs Act, new rules were enacted which required the inclusion of global intangible low-taxed income (“GILTI”) generated by a controlled foreign corporation (“CFC”). Internal Revenue Code Section 951A governs GILTI. The purpose of GILTI is to tax U.S. shareholders on their allocable share of earnings from a CFC to the extent that the earnings exceed a ten percent return on tangible assets allocable to a CFC shareholder. GILTI is determined by subtracting net deemed tangible income return from net CFC tested income. A CFC shareholder must calculate its GILTI inclusion on Internal Revenue Service (“IRS”) Form 8992. This article will go line by line through the Form 8992 to determine how a GILTI inclusion is determined. This article is based on…