Cross-border Tax Talks

US Update: the long-awaited PTEP regs

Doug McHoney (PwC’s International Tax Services Global Leader) is joined by Laura Williams, an International Tax Principal at PwC’s Washington National Tax Services office. Laura previously worked as the International Branch Chief at the IRS Office of Chief Counsel. Doug and Laura discuss the long awaited previously taxed earnings and profits (PTEP) proposed regulations. Together they walk through the core aspects of the PTEP regime, including PTEP accounting, increases and decreases to basis of stock and other property, foreign currency gain or loss, allocation of foreign tax credits, 'covered distributions’, US consolidated group rules, and the anti-avoidance rule. See our PwC Tax Insight for more details. 

Timestamps:

• 1:30 – Why did Laura go to law school when she was working as an auditor?  
• 3:00 – What are previously taxed earnings and profits (PTEP)?  
• 6:30 – How long has the US Treasury been working on this package and why did it take so long to be released? 
• 8:30 – What akey things taxpayers should be aware of from the reg package? 
• 10:30 – What are taxpayers now required to track under the Section 959 PTEP Accounting rules? 
• 13:45 – What are the rules for distributions of PTEP? 
• 15:45 – What are the rules for allocating and apportioning taxes? 
• 16:15 – What are general successor transactions, and what do the rules say? 
• 18:30 – What are property units in basis under Section 961? 
• 20:20 – What are the rules for basis reduction and gain recognition for certain distributions? 
• 20:30 – For US shareholders 
• 21:30 – For partnerships 
• 23:45 – For controlled foreign corporations 
• 25: 00 – What are the basis reduction rules for foreign currency gain or loss? 
• 26:30 – What is the assignment and allocation of “covered items” under Section 951? 
• 28:00 - What is the concept of ‘covered distributions’ and ‘covered gains’? 
• 29:30 – What are some of the highlights of the Section 986(c)regulations? 
• 31:00 – What are the new rules for US consolidated groups? 
• 33:10 – How did Treasury and the IRS approach the new anti-avoidance rules? 
• 36:00 – What are the effective dates for the proposed regulations? 
• 37:40 – Does IRS/Treasury actually listen to taxpayer comments?  
• 38:40 – How could the new Administration affect these proposed regulations?

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