Section 965: Understanding the Transition Tax
The 2017 tax act, Pub. L. No. 115-97, included a one-time toll charge on income accumulated overseas. More specifically, §965 imposes a transition tax on certain deferred foreign income of U.S. shareholders of a so-called “deferred foreign income corporation” in the last taxable year of that corporation which begins before January 1, 2018. The §965 transition tax is intended to facilitate the transition to the new participation exemption system under §245A.
This report includes news and analysis from Bloomberg Tax, breaking down the transition tax rules and providing a look into what to expect on these issues in the coming months.