FOREIGN TRUST WITH U.S. JURISDICTION?
FRACTIONAL OWNERSHIP OF A FOREIGN ENTITY?
The Tax Season for filing 2018 tax returns is now upon us and the full brunt of the Tax cuts and Job Act (TCJA) will occupy tax compliance by both the Taxpayers and the Tax Preparers. One of the most staggering provisions of the TCJA is the situation where your client owns an interest in a foreign entity directly or indirectly through a tiered-entity-structure, (TES).
The above threshold test will certainly raise eyebrows and compel the additional questioning to determine if you or your client falls into this catch-all provision. A simple example of indirect ownership, TES, is as follows:
The above basic schematic shows how e