Subpart F Income Part 1 - Overview

[@irsmedic]

This is beyond awesome!!!! Audra you totally rock!!! Content and delivery TOP NOTCH!

[@AccountingwithAudra]

Thank you. I really appreciate the feedback.

[@wadewishneski3075]

If a wholly owned CFC makes sales (provides services) to a US Corporation (owned by the same shareholder) is this considered Subpart F income since the sale is outside the CFC's country?

[@AccountingwithAudra]

not necessarily. see videos 2 and 3 for more examples. it depends on whether the CFC produces the products or buys them from related vs. unrelated parties.

[@wadewishneski3075]

CFC sells services to US Corp (same shareholders) because labor is less in CFC country and its a more skilled workforce@@AccountingwithAudra

[@wadewishneski3075]

The CFC sells services, not product, to the US Corp which has the same shareholders as the CFC, are the sales to the US Corp considered FBCSI (subpart F) income (sales) @@AccountingwithAudra

[@AccountingwithAudra]

these are not considered "sales" but instead the provision of services under fbcservices income. not all services performed are subF just because the US shareholder is the recipient of the services. It is possible they are not if performed within the CFC's country, are arm's length under 482, and not on behalf of some other party.

[@davidkim2368]

Hey Audra. Thank you for these detailed videos. Your use of examples to explain challenging concepts has been a great help. I was wondering if you have a business email to reach out to for consultations.

[@AccountingwithAudra]

Glad it was helpful! Unfortunately i am not doing any side consulting at this point in time.

[@AccountingwithAudra]

Just published the 4th video, after applying exceptions to the base rule, be sure to follow the final steps and special rules to help determine the net inclusion. kzbin.info/www/bejne/a56aqnunf9d9hKM