Form 8993 and Claiming the Section 250 Deduction
By Anthony Diosdi IntroductionPublic Law 115-97 (Tax Cuts and Jobs Act of 2017) enacted Internal Revenue Code Section 250 for the allowance of a deduction for the eligible percentage of Foreign-Derived Intangible (“FDII”) and Global Low-Taxed Income (“GILTI”). Form 8993 is utilized to determine the amount eligible for a deduction against FDII and GILTI under Section 250. All domestic corporations (and U.S. individual shareholders of controlled foreign corporations (“CFCs”)) making a Section 962 election must use Form 8993 to determine the allowable deduction under Section 250. This article will go line by line through the Form 8993 to determine how a Section 250 deduction is determined. This article is based on the Internal Revenue Service (“IRS”) instructions to Form 8993.Internal Revenue Code Section 250 DeductionEffective for taxable years of foreign…