{"id":1376,"date":"2020-12-01T15:42:49","date_gmt":"2020-12-01T15:42:49","guid":{"rendered":"https:\/\/sftaxcounsel.com\/?p=1376"},"modified":"2020-12-03T05:44:46","modified_gmt":"2020-12-03T05:44:46","slug":"demystifying-the-all-new-2020-tax-year-irs-form-5471-schedule-p-tracking-previously-taxed-earnings-and-profits-of-u-s-shareholder-of-certain-foreign-corporations","status":"publish","type":"post","link":"https:\/\/sftaxcounsel.com\/demystifying-the-all-new-2020-tax-year-irs-form-5471-schedule-p-tracking-previously-taxed-earnings-and-profits-of-u-s-shareholder-of-certain-foreign-corporations\/","title":{"rendered":"Demystifying the All New 2020 Tax Year IRS Form 5471 Schedule P Tracking \u201cPreviously Taxed Earnings and Profits of U.S. Shareholder of Certain Foreign Corporations\u201d"},"content":{"rendered":"\n

By Anthony Diosdi<\/strong><\/p>\n\n\n\n


Introduction<\/strong>
<\/strong>
<\/strong>Schedule P of Form 5471 is used to report PTEP of the U.S. shareholder of a controlled foreign currency (\u201cCFC\u201d) in the CFC\u2019s functional currency. The term PTEP refers to earnings and profits (\u201cE&P\u201d) of a foreign corporation. <\/strong>Schedule P like Schedule J and Schedule E has given tax practitioners fits the last two tax seasons. Much of this confusion is the result of the Section 959 ordering and basketing rules. Things are not likely to improve next tax season because international tax practitioners will also need to understand the new extraordinary disposition and extraordinary reduction rules to properly complete Schedule P. On August 24, 2020, the IRS issued a draft for Schedule P (without any instructions) for the 2020 tax year. Although the 2020 Schedule P is only in \u201cdraft\u201d format, we do not anticipate many if any changes to the form before next tax season.

Since we are still a couple months away from the 2020 tax season, the timing is perfect to dissect the new Schedule P. This article will dive into each column and line of the new 2020 draft Schedule P. We will also attempt to provide guidance as to how to prepare this incredibly complicated return.
<\/strong>
<\/strong>Who Must Complete the Form 5471 Schedule P?<\/strong>
<\/strong>
<\/strong>Anyone preparing a Form 5471 knows that the return consists of many schedules. Schedule P is just one schedule of the Form 5471. Whether or not a shareholder of a CFC is required to complete Schedule P depends on what category of filer he or she can be classified as. For purposes of Form 5471, CFC shareholders are broken down by the following categories:

Category 1- <\/strong>includes a US shareholder of a Section 965 \u201cspecified foreign corporation\u201d at any time during any tax year of the foreign corporation, and who owned that stock on the last day in that year. A specified foreign corporation includes: 1) a controlled foreign corporation, or 2) any foreign corporation with respect to which one or more domestic corporations are a US shareholder.

Category 2- <\/strong>US persons who are officers or directors of a foreign corporation in which since the last time Form 5471 was filed, a US person has acquired a ten percent or greater ownership or acquired ten percent or greater ownership.

Category 3- <\/strong>A US person who (a) has acquired a cumulative ten percent or greater ownership in the outstanding stock of the foreign corporation, (b) since the last filing of Form 5471 has acquired an additional ten percent or greater ownership in such stock, (c) owns ten percent or greater of the value of the outstanding stock of the foreign corporation when it is reorganized, or (d) disposes of sufficient stock in the foreign corporation to reduce the value of his ownership of stock in that corporation to less than ten percent, or who becomes a US person while owning ten percent, or who becomes a US person while owning ten percent or greater in value of the outstanding stock of the foreign corporation.

<\/strong>Category 4- <\/strong>a US person who had \u201ccontrol\u201d of a foreign corporation for an uninterrupted period of at least 30 days during the foreign corporation\u2019s annual accounting period. Control means more than 50 percent of the voting power or value of the CFC applying the Section 958 attribution rules.
<\/strong>
<\/strong>Category 5- <\/strong>A US person who is a ten percent or greater shareholder in a corporation that was a CFC for an uninterrupted period of thirty days during its annual accounting period and who owned stock in the CFC on its last day of its annual accounting period.
<\/strong>
<\/strong>Category 1, Category 4, and Category 5 filers need to complete Schedule P.
<\/strong>
Lines a and b<\/strong>
<\/strong>
<\/strong>Schedule P begins by asking the preparer to complete lines a and b. Line a specifically asks the preparer to determine the category of income and enter the applicable corresponding code. In order to answer the question on Line a, the preparer must reference the instructions to IRS Form 1118. IRS Form 1118 states that there are six categories of foreign source income to be reported on Schedule J and assigns codes to each category of income. The preparer may select from the applicable categories of income and codes listed below:

Code<\/strong>\t<\/strong>\t<\/strong>\t<\/strong>Category of Income<\/strong>
<\/strong>
<\/strong>951A\t\t\tSection 951A Category Income

FB\t\t\tForeign Branch Category Income

PAS\t\t\tPassive Category Income

901j\t\t\tSection 901(j) Income

RBT\t\t\tIncome Re-Sourced by Treaty

GEN\t\t\tGeneral Category Income

Below is a definition of each category of foreign source income:

Section 951A Category Income<\/strong>
<\/strong>
<\/strong>Section 951A (GILTI inclusions) category income is any amount includible in gross income under Section 951A (other than passive category income).

Foreign Branch Category Income<\/strong>
<\/strong>
<\/strong>Foreign branch income is defined under Internal Revenue Code Section 904(d)(2)(j)(i) as the business profits of a U.S. person which are attributable to one or more Qualified Business Units (\u201cQBUs\u201d).

Passive Category Income<\/strong>
<\/strong>
<\/strong>Passive income is generally the following:
<\/p>\n\n\n\n

  1. Any income received or accrued that would be foreign personal holding company income if the corporation were a CFC. This includes any gain on the sale or exchange of stock that is more than the amount treated as a dividend under Section 1248.<\/li>
  2. Any amount includible in gross income under Section 1293 (which relates to certain passive foreign investment companies (\u201cPFICs\u201d).

    <\/li><\/ol>\n\n\n\n

    Section 901(j) Income

    <\/strong>Section 901(j) income is income earned from a sanctioned country.

    Income Re-Sourced by Treaty

    <\/strong>If a sourcing rule in an applicable income tax treaty treats any U.S. source income as foreign source, and the corporation elects to apply the treaty, the income will be treated as foreign source.

    General Category Income

    <\/strong>This category includes all income not described above.

    Line b<\/strong>

    Line b states that if Code 901j is entered on Line a, the country code for the sanctioned country using the two-letter codes (from the list at IRS.gov\/countrycodes) must be entered.

    Part 1 Previously Taxed E&P in Functional Currency

    <\/strong>Part 1 of Schedule P requires the preparer to report the PTEP of the U.S. shareholder of a CFC in the CFC\u2019s functional currency. Schedule P requires the preparer to disclose the earnings and profits of a foreign corporation attributed to foreign taxes to use the special ordering rules of Section 959 to determine the ordering and taxation of each PTEP. This all matters because of one significant purpose – the calculation of available foreign tax credits against U.S. income is determined by the Section 959 ordering and basketing rules. For example, any foreign taxes paid or accrued on GILTI income or allocated to a special GILTI basket cannot be used to offset income in another category of foreign source income.\u00a0

    Where the earnings and profits of a CFC consists in whole or in part of PTEP, special rules under Section 959 apply in determining the ordering and taxation of distributions of such PTEP. A PTEP distribution is generally sourced in the following order: 1) PTEP attributable to investments in US property under Section 959(c)(1); 2) PTEP attributable to subpart F income under Section 959(c)(2); and 3) general current and accumulated E&P under Section 959(c)(3). For Section 959 purposes, and subject to recent PTEP guidance discussed below, a distribution is generally attributed to E&P according to the \u201clast in first out\u201d method (\u201cLIFO\u201d) based on the year income was earned. For example, a distribution is treated as if it were first made out of a CFC\u2019s current year E&P, and then the CFC\u2019s prior year accumulated E&P.

    In 2018, the IRS and the Department of Treasury announced Notice 2019-01. This Notice indicated the IRS\u2019s and Department of Treasury\u2019s intention to withdraw prior proposed regulations under Section 959 and issue new proposed regulations. As of this date, new regulations for Section 959 have not been promulgated by the IRS and Department of Treasury. Instead, in Notice 2019-01, the IRS and Department of Treasury described new rules related to the maintenance of PTEP accounts and new rules associated with the ordering of PTEPs. Below, we will analyze the ordering rules discussed in Notice 2019-01 in order to complete Schedule E-1

    Below, please find Illustration 1 which (based on the example stated in IRS Notice 2019-01) provides how to report \u201cPreviously Taxed E&P\u201d in accordance with Internal Revenue Code Section 959(c)(1)(A).

    Illustration 1.

    <\/strong>USP, a domestic corporation, wholly owns FC, a foreign corporation that has the U.S. dollar as its functional currency. Both USP and FC use the calendar year as their taxable year. Before 2018, the PTEP of FC was maintained in annual accounts. As of December 31, 2018, FC\u2019s $300x of E&P (before taking into account distributions made or inclusions under Section 951(a)(1)(B) in 2018) applicable to USP\u2019s interest in FC are classified under Notice 2019-01 as Section 3.01 as follows:<\/p>\n\n\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t
    Section 959(c)(1)<\/div><\/td>\n\t\t\t
    Section 959(c)(1)<\/div><\/td>\n\t\t<\/tr>\n\t\t
    Year<\/u><\/td>\n\t\t\t965(a)<\/u><\/td>\n\t\t\t965(b)<\/u><\/td>\n\t\t\t951(a)(1)(B)<\/u><\/td>\n\t\t\t965(a)<\/u><\/td>\n\t\t\t965(b)<\/u><\/td>\n\t\t\t951A<\/u><\/td>\n\t\t\t951(a)(1)(A)<\/u><\/td>\n\t\t\t959(c)(3)<\/u><\/td>\n\t\t<\/tr>\n\t\t
    2018<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t50x<\/td>\n\t\t\t30x<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    2017<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t100x<\/td>\n\t\t\t50x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t20x<\/td>\n\t\t<\/tr>\n\t\t
    2016<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    Total<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t255x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t20x<\/td>\n\t\t<\/tr>\n\t<\/tbody>\n<\/table>\n\n\n\n

    In 2018, FC has an amount described in Section 956(a) (\u201csection 956(a) amount\u201d) of $125x, without considering the application of Section 959(a)(2). In 2019, FC earns $25x of current E&P, and the amount of USP\u2019s income inclusion under Section 951A(a) that is allocated to FC under Section 951A(f)(2) and proposed Treasury Regulation Section 1.951A-6(b)(2) is $20x. FC also makes a distribution of $195x in 2019. In 2020, FC earns no current E&P, but FC makes a distribution of $60x. For all years, the PTEP of FC in each PTEP group is described in a single 904 category, and all Section 959(c)(3) E&P of FC are described in a single Section 904 category.

    Analysis for 2018

    As of December 31, 2018, before considering FC\u2019s Section 956(a) amount, FC has total Section 959(c)(2) PTEP of $255x. Under Section 959(a)(2) and (f)(1), because FC\u2019s Section 959(c)(2) PTEP exceeds its Section 956(a) amount, USP does not include any amount in income under Section 951(a)(1)(B). However, under Section 959(c)(1)(A), $125x of FC\u2019s Section 959(c)(2) earnings must be reclassified as Section 959(c)(1) PTEP. The reclassified PTEP remains in the 2017 annual PTEP account. Thus, in FC\u2019s 2017 annual PTEP account, FC\u2019s reclassified Section 965(a) PTEP is increased by $100x and its Section 965(a) PTEP is decreased by $100x. Additionally, FC\u2019s reclassified Section 965(b) PTEP is increased by $25x and its Section 965(b) PTEP is decreased by $25x. Accordingly, as of December 31, 2018, FC\u2019s E&P applicable to USP\u2019s interest in FC.<\/p>\n\n\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t
    Section 959(c)(1)<\/div><\/td>\n\t\t\t
    Section 959(c)(2)<\/div><\/td>\n\t\t<\/tr>\n\t\t
    Year<\/u><\/td>\n\t\t\t965(a)<\/u><\/td>\n\t\t\t965(b)<\/u><\/td>\n\t\t\t951(a)(1)(B)<\/u><\/td>\n\t\t\t965(a)<\/u><\/td>\n\t\t\t965(b)<\/u><\/td>\n\t\t\t951A<\/u><\/td>\n\t\t\t951(a)(1)(A)<\/u><\/td>\n\t\t\t959(c)(3)<\/u><\/td>\n\t\t<\/tr>\n\t\t
    2018<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t50x<\/td>\n\t\t\t30x<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    2017<\/td>\n\t\t\t100x<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t20x<\/td>\n\t\t<\/tr>\n\t\t
    2016<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    Total<\/td>\n\t\t\t<\/td>\n\t\t\t150x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t130x<\/td>\n\t\t\t<\/td>\n\t\t\t20x<\/td>\n\t\t<\/tr>\n\t<\/tbody>\n<\/table>\n\n\n\n


    2019 Year Adjustment

    During 2019, FC earns $25x of current E&P, and the amount of USP\u2019s income inclusion under Section 951A(a) that is allocated to FC under Section 951A(f)(2) and proposed Treasury Regulation Section 1.951A-6(b)(2) is $20x. Thus, before taking into account USP\u2019s income inclusion with respect to FC and any distributions by FC, FC\u2019s Section 959(c)(3) E&P is initially increased by $25x. As a result of USP\u2019s income inclusion under Section 951A. FC\u2019s Section 951A PTEP increases by $20x and FC\u2019s Section 959(c)(3) E&P is decreased by $20x. Accordingly, as of December 31, 2019, FC\u2019s E&P (before taking into account distributions made in 2019) applicable to USP\u2019s interest in FC are classified as follows:
    <\/p>\n\n\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t
    Section 959(c)(1)<\/div><\/td>\n\t\t\t
    Section 959(c)(2)<\/div><\/td>\n\t\t<\/tr>\n\t\t
    Year<\/u><\/td>\n\t\t\t965(a)<\/u><\/td>\n\t\t\t965(b)<\/u><\/td>\n\t\t\t951(a)(1)(B)<\/u><\/td>\n\t\t\t965(a)<\/u><\/td>\n\t\t\t965(b)<\/u><\/td>\n\t\t\t951A<\/u><\/td>\n\t\t\t951(a)(1)(A)<\/u><\/td>\n\t\t\t959(c)(3)<\/u><\/td>\n\t\t<\/tr>\n\t\t
    2019<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t20x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    2018<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t50x<\/td>\n\t\t\t30x<\/td>\n\t\t\t25x<\/td>\n\t\t<\/tr>\n\t\t
    2017<\/td>\n\t\t\t100x<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    2016<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    Total<\/td>\n\t\t\t<\/td>\n\t\t\t150x<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t150x<\/td>\n\t\t\t<\/td>\n\t\t\t20x<\/td>\n\t\t<\/tr>\n\t<\/tbody>\n<\/table>\n\n\n\n


    Distribution

    FC\u2019s distribution of $195x is from PTEP because the entire distribution would be a dividend under Section 316(a) without regard to Section 959 that is, for the purpose of Section 316, at the end of 2019, FC has $325x of E&P (without regard to this distribution), $25x of which is current E&P). Under Section 959(c), the distribution is first treated as attributable to Section 959(c)(1) PTEP.

    Section 959(c)(1) PTEP

    The distribution is first sourced from reclassified Section 965(a) PTEP and then from reclassified Section 965(b) PTEP, and then pro rata from the remaining PTEP groups that contain Section 959(c)(1) PTEP under a last-in, first-out (\u201cLIFO\u201d) approach. Thus, in FC\u2019s 2017 annual PTEP account, FC\u2019s reclassified Section 965(a) PTEP is decreased by $100x and its reclassification Section 965(b) PTEP is decreased by $25x. In FC\u2019s 2016 annual PTEP account, FC\u2019s Section 951(a)(1)(B) PTEP is reduced by $25x. Thus, of the distribution of $195x, $150x is treated as attributable to Section 959(c)(1) PTEP ($100x + $25x + $25x).

    Section 959(c)(2) PTEP

    After the Section 959(c)(1) PTEP is exhausted, the remaining portion of the distribution ($45x) is treated as attributable to Section 959(c)(2) PTEP, to the extent thereof. The distributions are first sourced from Section 965(a) PTEP and then from Section 965(b) PTEP, and then pro rata from the remaining PTEP groups that contain Section 959(c)(2) PTEP under a LIFO approach. Thus, in FC\u2019s 2017 annual PTEP account, FC\u2019s Section 965(b) PTEP is decreased by $25x. In FC\u2019s 2019 annual PTEP account, FC\u2019s Section 951A PTEP is decreased by $20x. Because the entire distribution has been accounted for, the remaining PTEP groups that contain Section 959(c)(2) PTEP and FC\u2019s Section 959(c)(3) E&P are not affected. Accordingly, as of December 31, 2019, FC\u2019s E&P applicable to USP\u2019s interest in FC are classified as follows:
    <\/p>\n\n\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t
    Section 959(c)(1)<\/div><\/td>\n\t\t\t
    Section 959(c)(2)<\/div><\/td>\n\t\t<\/tr>\n\t\t
    Year<\/u><\/td>\n\t\t\t965(a)<\/u><\/td>\n\t\t\t965(b)<\/u><\/td>\n\t\t\t951(a)(1)(B)<\/u><\/td>\n\t\t\t965(a)<\/u><\/td>\n\t\t\t965(b)<\/u><\/td>\n\t\t\t951A<\/u><\/td>\n\t\t\t951(a)(1)(A)<\/u><\/td>\n\t\t\t959(c)(3)<\/u><\/td>\n\t\t<\/tr>\n\t\t
    2019<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    2018<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t50x<\/td>\n\t\t\t30x<\/td>\n\t\t\t25x<\/td>\n\t\t<\/tr>\n\t\t
    2017<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    2016<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    Total<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t150x<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t<\/tr>\n\t<\/tbody>\n<\/table>\n\n\n\n


    2020

    FC\u2019s distribution of $60x is from PTEP because the entire distribution would be divided under Section 316(a) without regard to Section 959 (that is, for purposes of Section 316, at the end of 2020, FC has $130x of E&P (without regard to the distribution), all which is accumulated E&P). Under Section 959(c), the distribution is first treated as attributable to Section 959(c)(1) PTEP; however, FC has no Section 959(c)(1) PTEP. Additionally, FC has no Section 965(a) PTEP or Section 965(b) PTEP. This distribution is sourced pro rata from the remaining PTEP groups that contain Section 959(c)(2) PTEP under a LIFO approach. Thus, in FC\u2019s 2018 annual PTEP account, FC\u2019s Section 951A PTEP is decreased by $37.5x ($60x x $50x\/$80X) and its Section 951(a)(1)(A) PTEP is decreased by $22.5x ($60x x $30x\/$80x). Because the entire distribution has been accounted for, the remaining PTEP groups that contain Section 959(c)(2) PTEP and FC\u2019s Section 959(c)(3) E&P are not affected. Accordingly, as of December 31, 2010, FC\u2019s E&P applicable to USP\u2019s interest in FC are classified as follows:<\/p>\n\n\n\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t
    Section 959(c)(1)<\/div><\/td>\n\t\t\t
    Section 959(c)(2)<\/div><\/td>\n\t\t<\/tr>\n\t\t
    Year<\/u><\/td>\n\t\t\t965(a)<\/u><\/td>\n\t\t\t965(b)<\/u><\/td>\n\t\t\t951(a)(1)(B)<\/u><\/td>\n\t\t\t965(a)<\/u><\/td>\n\t\t\t965(b)<\/u><\/td>\n\t\t\t951A<\/u><\/td>\n\t\t\t951(a)(1)(A)<\/u><\/td>\n\t\t\t959(c)(3)<\/u><\/td>\n\t\t<\/tr>\n\t\t
    2019<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    2018<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t12.5x<\/td>\n\t\t\t7.5x<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    2017<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t<\/tr>\n\t\t
    2016<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t
    Total<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t<\/td>\n\t\t\t45x<\/td>\n\t\t\t<\/td>\n\t\t\t25x<\/td>\n\t\t<\/tr>\n\t<\/tbody>\n<\/table>\n\n\n\n

    Now since we reviewed the basic rules governing Section 959 and the ordering of PTEPs, we will now discuss the categories of PTEPs of Schedule P. Schedule P requires a CFC to categorize E&P from a CFC to a category of income and apply the 959 ordering rules to categories of income. For the 2019 tax year, CFC shareholders had to allocate E&P distributed to them by a CFC to the following 16 categories:\u00a0

    1. Section 965(a) Inclusion (Section 959(c)(1)(A));

    2. Section 965(b)(4)(A) (Section 959(c)(1)(A));

    3. Earnings Invested in U.S. Property (Section 959(c)(1)(A));

    4. Section 951A Inclusions (Section 959(c)(1)(A);

    5. Section 245(e)(2) Inclusion (Section 959(c)(1)(A));

    6. Section 959(e) (Section 959(c)(1)(A));

    7. Section 964(e)(4) Inclusion (Section 959(c)(1)(A));

    8. Section 951(a)(1)(A) Inclusion (Section 959(c)(1)(A);

    9. Earnings Invested in Excess Passive Assets (Section 959(c)(1)(B);

    10. Section 965(a) Inclusion (Section 959(c)(2));

    11. Section 965(b)(4)(A) (Section 959(c)(2));

    12. Section 951A Inclusion (Section 959(c)(2));

    13. Section 245(e)(2) Inclusion (Section 959(c)(2));

    14. Section 959(e) (Section 959(c)(2));

    15. Section 964(e)(4) Inclusion (Section 959(e)(2));

    16. Section 951(a)(1)(A) Inclusion (Section 959(c)(2)).

    The big change to Schedule P in 2020 is the number of columns in which a CFC shareholder reports E&P. For the 2020 the IRS not reduced the columns in Part 1 of Schedule J from 16 to 10, the IRS also replaced the income characterization of each column for the 2020 tax year. It will be interesting to see if the IRS issues any new guidance as to how taxpayers will reclassify PTEPs from categories that have been eliminated to new PTEP categories. In the meantime, we will walk through each PTEP column that will likely be on the 2020 Schedule P.

    For the 2020 tax year, CFC shareholders will need to allocate foreign source E&P in functional currency to the following categories:

    1. Reclassified Section 965(a) PTEP;

    2. Reclassified Section 965(b) PTEP;

    3. General Section 959(c)(1) PTEP;

    4. Reclassified Section 951A PTEP;

    5. Reclassified Section 245A(d) PTEP;

    6. Section 965(a) PTEP;

    7. Section 965(b) PTEP;

    8. Section 951A PTEP;

    9. Section 245A(d) PTEP;

    10. Section 951(a)(1)(A) PTEP.

    Column (a). Reclassified Section 965(a) PTEP<\/strong>

    In order to properly classify E&P in columns (a), (b), (f), and (g), the preparer of Schedule P must understand Internal Revenue Code Section 965. In order to smooth the transition to the participation exemption system of taxation introduced by the Tax Cuts and Jobs Act of 2018, Internal Revenue Code Section 965 was revised to be a one-time increase in subpart F income of qualifying foreign corporations. Section 965 generally requires that for the last taxable year of a foreign corporation beginning before January 2018, all U.S. shareholders of any CFC or other foreign corporation that is at least 10 percent U.S. owned but not controlled is required to include in income their pro rata share of the accumulated post-1986 deferred foreign income that was not previously taxed. This is defined as the transition tax.

    The transition tax is treated as a mandatory subpart F inclusion. Internal Revenue Code Section 965 requires a \u201cdeferred foreign income corporation\u201d (\u201cDFIC\u201d) to increase its subpart F income in its last taxable year that began before January 1, 2018, by the greater of its \u201caccumulated post-1986 deferred foreign income\u201d as of November 2, 2017 or its accumulated post-1986 deferred foreign income as of December 31, 2017. A deduction is available under Section 965(b) for a portion of that pro rata share of deferred foreign income, and the amount of the deduction varies depending upon whether the deferred foreign income is held in the form of liquidate or illiquid assets. For purposes of column (a) of Schedule P, the CFC shareholder must state the total amount that was required to be included in income under Section 965(a) that has been reclassified under the 959 ordering rules.

    Column b. Reclassified 965(b) PTEP<\/strong>

    For column b, the preparer must disclose any Section 965(b) PTEP for previously taxed earnings generated by the allocation of SFC deficits to SFC\u2019s with a Section 965(a) earnings amount. The 965(b) PTEP listed under column b is for E&P deficits that have been reclassified under the 959 ordering rules.

    Column c. General Section 959(c)(1) PTEP

    <\/strong>For column c, the preparer must disclose any PTEPs associated with Section 959(c)(1) which is attributable to investments in U.S. property. U.S. property generally includes most tangible and intangible property owned by the foreign corporation that has a U.S. situs such as stock in a domestic corporation; an obligation of a U.S. person; and a right to use a patent, copyright, or other forms of intellectual property in the United States if acquired or developed by the foreign corporation.

    Column d. Reclassified Section 951A PTEP

    <\/strong>For column d, the preparer must disclose any PTEPs associated with reclassified (under the Section 959 ordering rules) Section 951A rules. Internal Revenue Code Section 951A refers to global intangible low-taxed income (\u201cGILTI\u201d). GILTI is the residual of a CFC\u2019s income above a 10 percent return on its investment in tangible depreciable assets (defined as \u201cqualified business asset investment\u201d or QBAI).

    A U.S. shareholder\u2019s GILTI for a taxable year is the excess, if any, of the U.S. shareholders\u2019 \u201cnet CFC tested income\u201d for the taxable year over that shareholder\u2019s \u201cnet deemed income return\u201d for the taxable year over that shareholder\u2019s \u201cnet deemed tangible income return\u201d for the taxable year. Net CFC tested income with respect to any U.S. shareholder is the excess of the aggregate of the shareholder\u2019s pro rata share of the \u201ctested income\u201d of the CFC over the aggregate of the shareholder\u2019s pro rata share of the \u201ctested loss\u201d of the CFC.

    Column e. Reclassified Section 245A(d) PTEP
    <\/strong>
    For column e, the preparer must disclose reclassified E&P (under the Section 959 ordering rules) divides which deductions are not permitted under Section 245A(d). Column e is a brand new column for Schedule P. Column e was likely added to Schedule P to take into consideration the new final and proposed regulations for Section 245A which discuss extraordinary dispositions and extraordinary reductions rules. Section 245A allows domestic corporations a 100 percent dividend received deduction for the foreign source portion of a dividend received 10 percent owned SFC provided that certain requirements are satisfied such as a holding period is met and the dividend is not classified as a \u201chybrid dividend\u201d under Section 245A(e). Recently, the IRS became concerned that the dividends received deduction rules of Section 245A could be used by domestic corporations to shift income to a related foreign entity set up in a low-taxed country, and that income could be shifted back to U.S. shareholders without being subject to U.S. tax.

    The IRS issued final and proposed regulations to combat income shifting to low-tax foreign jurisdictions or tax havens to avoid U.S. taxation. The final regulations promulgated by the IRS for Section 245A(d) disallow dividend deductions for the sum of 1) 50 percent of the extraordinary disposition amount, and 2) 100 percent of the extraordinary reduction amount.

    Extraordinary Disposition Amount

    <\/strong>For certain fiscal-year controlled foreign corporations, a gap existed between the last E&P measurement date for the purposes of the Section 965 transition tax – Dec. 31, 2017 – and the effective date of the GILTI provisions (the disqualified period). The GILTI provisions are effective as of the first day of the first year beginning after Dec. 31, 2017. For fiscal year CFCs having a year-end of November 30, for example, the disqualified period was 11 months long. During this period, the CFC could sell assets to a related foreign party in a transaction not subject to GILTI. The sales proceeds could then be repatriated tax-free under the Section 245A dividend received deduction rules. For the buyer (and subject to the disqualified basis rules discussed below), the sale would have created a stepped-up tax basis in the assets, thereby resulting in increased deductions for amortization and depreciation that could reduce the buyer\u2019s future GILTI by reducing tested income and increasing QBAI.

    To prevent this result, the Final Regulations reduce the dividend reduction deduction allowed to a Section 245A shareholder by the amount equal to 50 percent of the \u201cextraordinary disposition amount\u201d (which is meant to approximate the 50 percent deduction domestic corporations generally are eligible for if such earnings were includable as GILTI). For a disposition to be an extraordinary disposition, the disposition must be: i) a disposition of specified property (i.e. property that produces gross income that would be subject to GILTI), by an SFC, ii) made on a date the SFC was also a CFC, iii) during the SFC\u2019s disqualified period, iv) to a related party, v) that occurs outside of the ordinary course of the SFC\u2019s business.

    Whether a disposition of specified property occurs outside the ordinary course of an SFC\u2019s business is determined by considering the facts and circumstances, including the quantity and frequency of the SFC\u2019s past activities, and whether the SFC regularly disposes of similar property to related parties. The 2019 Regulations provide a per se rule that a disposition is treated as outside of the ordinary course of the SFC\u2019s business if the disposition was undertaken with a principal purpose of generating E&P during the disqualified period or if the disposition was of intangible property, within the meaning of Section 367(d)(4). The Final Regulations create an exception to the per se rule for certain intangible property if there was a reasonable expectation that such property would be re-sold to an unrelated customer within one year of the transfer. Transfers of trademarks and goodwill, however, are not eligible for this exception because, in general, these types of intangible property are not routinely sold to unrelated customers. U.S. shareholders are required to maintain an extraordinary disposition account to track the extraordinary disposition amount and distributions of the same.

    Extraordinary Reduction Amount

    <\/strong>In addition to extraordinary disposition transactions, which were possible during the GILTI gap period, the regulations are also concerned with planning based on the interaction of Section 951(a)(2)(B), which reduces a U.S. shareholder\u2019s pro rata share of CFC subpart F income or GILTI tested income for dividends a different taxpayer receives in respect of the same CFC stock, and the Section 245A dividend reduction deduction. To prevent such planning, the Final Regulations treat dividends (or deemed dividends) that occur in the same year as an \u201cextraordinary reduction\u201d ineligible for the dividend received deduction to the extent of the U.S. shareholder\u2019s pre-reduction, pro rata share of the CFC\u2019s subpart F income or GILTI tested income. An extraordinary reduction occurs when a controlled Section 245A shareholder (generally, a U.S. shareholder that owns more than 50% of the stock of the CFC) transfers more than 10% of its stock to a CFC or there is a greater than 10% dilution in the controlling Section 245A shareholder\u2019s overall ownership of the CFC.

    Below, please find Illustration 2 which (based on Example 3 of the Final Regulations) illustrates a perceived abuse the extraordinary reduction provisions were designed to attack.

    Illustration 2.

    <\/strong>At the beginning of CFC1s tax year ending on Dec. 31, 2021, US1 owns all of the stock of CFC1, and CFC1 has no E&P described in Section 959(c)(1) or (2). As of the end of 2022, CFC1 has $160 of GILTI and no other income, so that CFC1 has $160 of E&P for 2022. On Oct. 19, 2022, US1 sells all of its CFC1 stock to US2 for $100 in a transaction in which US2 for $100 in a transaction in which US1 recognizes $90 of gain.

    Under Section 1248(a), the entire $90 of gain is included in US1\u2019s gross income as a deemed dividend, and, under Section 1248(j), the $90 would be treated as a dividend for purposes of applying Section 245A, dividend received deduction. At the end of 2022, however, US2 would take into account only $70 of tested income, calculated as $160 (100% of the $160 of GILTI) less $90, the amount of dividend deemed received by US1 described in Section 951(a)(2)(B).

    In this example, the Section 245A deemed dividend reduction eliminates taxation of the Section 1248 deemed dividend, which Section 951(a)(2)(B) reduces the post-sale GILTI tested income by $90 (the amount of the deemed dividend). To preclude this result, the Section 1248 deemed dividend in the example would qualify as an extraordinary reduction amount under the Final Regulations. Consequently, regarding the $90 deemed dividend received by US1, no portion is eligible for the 245A dividend received deduction. In addition, foreign tax credits are disallowed with respect to the deemed distribution.

    Any deduction (for foreign tax credits) under Section 245A(d) that has been disallowed and reclassified under the Section 959 ordering rules should be listed under column (e).

    Column (f). Section 965(a) PTEP

    <\/strong>For column (f), the CFC shareholder must state the total amount that is required to be included in income included in income under Section 965(a) that has been classified as a PTEP.

    Column (g). Section 965(b) PTEP

    <\/strong>For column (g), the CFC shareholder must disclose any Section 965(b) PTEP for previously taxed earnings generated by the allocation of SFC deficits with a Section 965(a) earnings amount. The 965(b) PTEP listed under column g is E&P deficits that has been classified as a PTEP.
    <\/strong>
    Column (h). Section 951A PTEP

    <\/strong>For column (h), the CFC shareholder must disclose any GILTI inclusion that has been classified as a PTEP.

    Column (i). Section 245A(d) PTEP

    <\/strong>For column (i), the CFC shareholder must disclose any foreign taxes or other deductions disallowed as a result of Section 245A(d) that has generated a PTEP.

    Column (j). Section 951(a)(1)(A) PTEP

    <\/strong>For column (j), the CFC shareholder must disclose any PTEP as a result of a subpart F inclusion from a SFC or CFC. Subpart F income is generally described as the CFC\u2019s sum of:

    1. Insurance income;

    2. Foreign base company income; and

    3. International boycott\u00a0 income and an amount equal to illegal bribe\/kickbacks paid on behalf of the SFC or CF and income derived from any foreign country for which Internal Revenue Code Section 901(j) denies a foreign tax credit for taxes paid to such country.

    Specific Instructions Related to Lines 1 Through 14

    Line 1a.

    <\/strong>Line 1a asks the preparer to enter the balances for each column at the beginning of the tax year. These balances should equal the amounts reported as the ending balances in the prior year Schedule P.

    Line 1b.

    <\/strong>Line 1b states if there is a difference between last year\u2019s ending balance on Schedule P and the amount which should be last year\u2019s ending balance, include the difference for the difference. If there are multiple differences, include the explanation and amount of each such difference on the attachment.

    Line 1c.

    <\/strong>Use line 1c to reflect adjustments to a U.S. person\u2019s foreign tax credit as a result of determining foreign income taxes. If a U.S. person has appropriately amended the immediate prior year return, including its Schedule P, to redetermine its U.S. tax liability, no adjustment should be included on this line. This line is only applicable if a U.S. person appropriately amended a prior year return and there were intervening years between the amended year return and the current year return for which an amended return was not filed. If so, an adjustment for the prior year amended return (and its impact on intervening years) should be reflected on line 1c.

    Line 2.

    <\/strong>Include in columns (c), (d), (h), and (j) foreign income taxes paid or accrued by the corporation during the prior years that were suspended due to the application of the rules of Section 909 and that are unsuspended in the current year because related income is taken into account by the foreign corporation, certain U.S. corporate U.S. corporate owner\u2019s consolidated group. Include as negative amount in columns (c), (d), (h), and (j) foreign income taxes related to the current tax year that have been unsuspended due to the rules of Section 909. By the way of background, a foreign tax credit is deductible only to the extent that the creditable tax is \u201cpaid or accrued.\u201d Foreign taxes are generally treated as paid by the corporation on whom foreign law imposes legal liability. Under this \u201ctechnical taxpayer\u201d rule, the corporation or person who has legal liability for a foreign tax can be different than the person who realizes the underlying income under U.S. tax principles, resulting in a separation or \u201csplitting\u201d of foreign income to which the taxes relate. In some cases, the \u201csplitting\u201d can result in foreign tax credits following up to an individual without the associated income being subject to U.S. tax. Congress enacted Internal Revenue Code Section 909 for this situation. Under Section 909, where there is a \u201cforeign tax credit splitting event\u201d with respect to foreign income tax paid or accrued by a taxpayer, the foreign income tax is not taken into account for U.S. tax purposes before the tax year in which the related income is taken into account by the CFC.

    Line 3.

    <\/strong>Line 3 asks the SFC or CFC shareholder to adjust each PTEP to take into consideration E&P attributable to distributions of previously taxed E&P from lower-tier foreign corporations.

    Line 4.

    <\/strong>Line 4 asks the SFC or CFC shareholder to adjust each PTEP for previously taxed E&P carried over in nonrecognition transactions. A nonrecognition transaction is a nonreclaimable gain or loss. It applies as long as a reorganization occurs solely for stock or securities.

    Line 5.

    <\/strong>Line 5 asks the SFC or CFC shareholder to make any other necessary adjustments.

    Line 6.

    <\/strong>Line 6 asks the SFC or CFC shareholder to combine lines 1c through 5.

    Line 7.

    <\/strong>Line 7 asks the SFC or CFC shareholder to state any Section 959(c)(2) E&P from Section 959(c)(3) E&P. In order to determine how to reclassify E&P from one category to another, IRS Notice 2019-01 describes the process in which a PTEP may be reclassified for Section 959 purposes. According to Notice 2019-01, each PTEP is subject to a special priority rule. Under this special priority rule, a PTEP arising from Section 965(a) and 965(b) have priority over other PTEPs. All other PTEPs are subject to the LIFO approach for the sourcing of distributions from annual PTEP accounts. Thus, subject to the special priority rule, section 959(c)(1) PTEP in the most recent annual PTEP account is treated as distributed first, followed by the second most recent annual PTEP account, and continued through each annual PTEP account under Section 959(c) is exhausted. The same approach will then apply to Section 959(c)(2) PTEP. Finally, the remaining amount of any distributions are sourced from Section 959(c)(3), to the extent thereof.

    The special priority rule provides an exception from the general LIFO approach described above for Section 965(a) and (b) PTEP under either Section 959(c)(1) or Section 959(c)(2). Starting with Section 959(c)(1) PTEP, distributions are sourced first from reclassified Section 965(a) PTEP and then reclassified Section 965(b) PTEP. Once these two PTEP groups are exhausted for Section 959(c)(1), the remaining annual PTEP accounts related to Section 959(c)(1) are sourced pro rata under LIFO approach until the Section 959(c)(1) are sourced rata under LIFO approach until the Section 959(c)(1) PTEP, distributions are then sourced from Section 959(c)(2) PTEP. Similarly, applying the special priority rule, distributions are first sourced from Section 965(a) PTEP and then from Section 965(b) PTEP. After exhausting Section 965(a) and (b) PTEP, distributions are then sourced pro rata from the remaining Section 959(c)(2) PTEP under the LIFO approach until such groups are exhausted. Finally, the remaining amount of any distributions are sourced from Section 959(c)(3) E&P, as necessary.

    Line 8.

    <\/strong>Line 8 asks the CFC or SFC shareholder to adjust each PTEP to take into account any actual distributions of previously taxed E&P.

    Line 9.

    <\/strong>Line 9 asks the CFC or SFC shareholder to make adjustments for amounts reclassified from Section 959(c)(2) to Section 959(c)(1) E&P. Below, please see\u00a0 Illustration 3 for an example regarding reclassifying Section 959(c)(1) E&P from Section 959(c)(2):

    Illustration 3.

    Domestic Corporation, a U.S. shareholder, wholly owns the only class of stock of CFC1, a foreign corporation. CFC1, in turn, wholly owns the only class of stock of CFC2, a foreign corporation. CFC2, in turn, wholly owns the only class of stock of CFC3, a foreign corporation. The functional currency of Domestic Corporation, CFC1, CFC2, and CFC3 is the U.S. dollar. During Year 1, Domestic Corporation reports an inclusion under Section 951(a)(1) of $100 as a result of subpart F income of CFC3. During Year 2, CFC3 distributes $40 to CFC2. CFC2 pays withholding tax of $4 on the distribution from CFC3. Such tax is a tax related to previously taxed subpart F income and is reported on line 4, column (e) of Schedule E-1 of CFC2\u2019s Form 5471. In Year 2 CFC2 invests $40 in U.S. property. At the time of investment in such property, CFC2 continues to maintain a $36 balance in its Section 959(c)(2) previously taxed E&P account.

    CFC2 reclassifies such amount as Section 959(c)(2) previously taxed E&P account. CFC2 reclassifies such an amount as Section 959(c)(1) previously taxed E&P on Schedule P. Accordingly, $4 of foreign income taxes related to Section 959(c)(2) previously taxed E&P is reclassified to Section 959(c)(1).

    Line 10.

    <\/strong>Line 10 asks the SFC or CFC shareholder to make an allocation for amounts categorized as earnings invested in U.S. property and reclassified to Section 959(c)(1).

    Line 11.

    <\/strong>Line 11 asks the SFC or CFC shareholder to a<\/strong>ttach a statement with a description and the amount of any adjustments required before taking into account taxes deemed paid by the foreign corporation. If applicable, the SFC or CFC shareholder should attach a statement with a description and the amount of any adjustments required for the foreign corporation. An example of an adjustment entered on line & is the foreign taxes imposed on receipt of a distribution of PTEP from a lower-tier foreign corporation.

    Line 12.

    <\/strong>For line 12, the SFC or CFC shareholder should r<\/strong>eport the balance at the beginning of the following year. This is done by combining lines 6 through 11.

    Conclusion

    <\/strong>Schedule P of Form 5471 is incredibly complicated. Make sure you retain an international tax attorney with many years of experience in international tax compliance to advise you regarding this incredibly complicated return.

    Anthony Diosdi is one of several international tax attorneys at Diosdi Ching & Liu, LLP. As an international tax attorney, Anthony Diosdi provides international tax advice to closely held entities and publicly traded corporations. Anthony Diosdi also represents closely held entities and publicly traded corporations in IRS examinations. Diosdi Ching & Liu, LLP has offices in Pleasanton, California and Fort Lauderdale, Florida. Anthony Diosdi advises clients in international tax matters throughout the United States. Anthony Diosdi may be reached at (415) 318-3990 or by email: adiosdi@sftaxcounsel.com<\/a>.\u00a0<\/p>\n\n\n\n


    This article is not legal or tax advice. If you are in need of legal or tax advice, you should immediately consult a licensed attorney.
    <\/p>\n","protected":false},"excerpt":{"rendered":"

    By Anthony Diosdi IntroductionSchedule P of Form 5471 is used to report PTEP of the U.S. shareholder of a controlled foreign currency (\u201cCFC\u201d) in the CFC\u2019s functional currency. The term PTEP refers to earnings and profits (\u201cE&P\u201d) of a foreign corporation. Schedule P like Schedule J and Schedule E has given tax practitioners fits the […]<\/p>\n","protected":false},"author":7,"featured_media":1377,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[18],"tags":[125,6],"_links":{"self":[{"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/posts\/1376"}],"collection":[{"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/comments?post=1376"}],"version-history":[{"count":13,"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/posts\/1376\/revisions"}],"predecessor-version":[{"id":1418,"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/posts\/1376\/revisions\/1418"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/media\/1377"}],"wp:attachment":[{"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/media?parent=1376"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/categories?post=1376"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sftaxcounsel.com\/wp-json\/wp\/v2\/tags?post=1376"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}