House Republicans To Retaliate for Discriminatory Foreign Taxes
House Republicans introduced legislation that would raise U.S. taxes on foreign entities when their home countries apply discriminatory taxes. The bill targets Pillar Two of the Organization for Economic Cooperation and Development’s global tax deal, the undertaxed profits rule (UTPR). The UTPR acts as a backstop to Pillar Two by letting other countries collect tax when a company is paying below a 15% effective tax rate and its parent country isn’t applying the minimum tax.
IRS Discusses When Regularly Traded Exception Applies to Partnership
The IRS chief counsel determined that the regularly traded exception in Section 897(c)(3) of the Internal Revenue Code applies at the partnership level when the partnership directly holds more than 5% of the stock in a U.S. real property holding corporation (USRPHC). Section 897(c)(3) provides that a corporation’s stock that is regularly traded on an established securities market is a U.S. real property interest only when the shareholder holds more than 5% of the stock. According to the chief counsel, Section 897(c)(3) applies at the partnership level when a partnership holds stock directly in a USRPHC.
U.S. Chamber Calls for Restoring Depreciation, Amortization Addback
The U.S. Chamber of Commerce submitted a letter to support proposed legislation that would revert a limitation in the calculation of adjusted taxable income for business interest expense purposes. Under the Tax Cuts and Jobs Act for tax years beginning in 2018, Section 163(j) was expanded more broadly to apply to more businesses, with the maximum deduction for business interest limited to a cap of 30% of a taxpayer’s adjusted taxable income. The CARES Act temporarily raised this cap to 50% for 2019 and 2020, but it fell back to 30% in 2021.
Information contained in this publication should not be construed as legal advice or opinion or as a substitute for the advice of counsel. The articles by these authors may have first appeared in other publications. The content provided is for educational and informational purposes for the use of clients and others who may be interested in the subject matter. We recommend that readers seek specific advice from counsel about particular matters of interest.
Copyright © 2023 Stradley Ronon Stevens & Young, LLP. All rights reserved.