Six Ways to avoid GILTI: How to beat the Global Intangible Low Tax Income

[@VERTICALWisdom]

Number seven, move where you are treated best and not a sheep to be sheared by rules even the best can hardly keep up with. In 2019, we are forming a business in South America and will immediately renounce citizenship. Tough emotional decision but knowing what we know about US taxes it is IMPOSSIBLE to always be in compliance no matter how much you want to be.

[@irsmedic]

I can't say that I blame you. I guess Congress wants more US citizens to renounce. Really no other explanation for these far, far-beyond Byzantine rules that have no legitimate tax purpose.

[@richdibo]

#7 - For an individual: A §962 election to be taxed as a corporation and claim the 50% §250 deduction and the §960 foreign tax credit.

[@whheerr1955]

constructive ownership rules pursuant I.R.C. 958(b) would directly attribute shares to shareholder IF GIVEN TO SPOUSES,KIDS, PARENTS, and CFC rules would remain applicable. However, the family attribution rules under Code §318(a)(1) do not treat an individual as owning stock actually owned by the individual’s siblings, grandparents, uncles, aunts, nephews, nieces etc. so perhaps by shifting shares to them it is possible to work your way around being a U.S. shareholder and therefore prevent CFC legislation to kick-in?

[@mattedge084]

Hello, i have found this: While a US taxpayer with ownership in a foreign LLC can also elect this “disregarded” treatment by a one-time filing of Form 8832, Form 8858 may still have an annual submission requirement thereafter. This form is required by any US person owning 100% of a foreign LLC that has elected to be treated as disregarded for tax purposes. The profits associated with the foreign LLC will still flow through to the personal return, but Form 8858 will be attached to the individual return reporting the additional foreign LLC information. If I understant it correctly, if I am sole owner of foreign LLC and I file form 8832 and elect to be treated as disregarded, I do not have to worry about GILTI, form 5471 and Subpart F for tax purposes? Thanks

[@irsmedic]

YES! Great job Matej. For us, disregarded entity doesn't work out for our clients so much. For most of them, they are better off paying the fee to get the 5471 done as opposed to paying what can be higher taexs with a disregarded entity. And then for many of our clients, we have old 5471s to file -- and we are too late to make a "check the box" election.

[@mattedge084]

@@irsmedic Yes, i can see when electing "disregarded" entity might be actually worse (like paying higher taxes). For me, it might be the way to go (at least I think), as I will be able to avoid double taxation, since I should be within the foreign earned income limit to also pay taxes in US.

[@owenhooker2682]

Could GILTI be avoided by gifting the CFC to my "Non Resident Alien" wife? Would the company then be considered to be owned by a non resident alien individual like in 1.958-2?

[@MIKEAB2010]

Do you file form 8993 with 1040 for the 250 deduction?

[@trevoreclark2286]

Have to update video. 962 election allows same deduction as a corporation.