Question

Did you ever want to be a corporation? Can US shareholders for CFC purposes be individuals? If so, then does mean they are taxed on their sec. 951(a) subpart F inclusions just like US Shareholders that are DCs? Are US Shareholder that are DCs able to use sec. 960 for sec. 951A GILTI? The answers to these questions are obviously yes. So, if you were a US shareholder of a CFC, then would you want to be treated as a corporation instead of an individual - what would be the benefit? Can you? Does this then mean you can take the sec. 960 deemed credit for GILTI inclusions? How would a person be taxed? If the individual were to be able to be treated as corporation, would it be advantageous?

Answer 1

Answer )Did you ever want to be a corporation? Yes , an individual can be act as a corporation for tax calculation pupose.

Answer ) US Share holders can be part of Controlled Foreign Corporation (CFC). A major advantage in filling annual Tax return by use of foreign corporation is income tax deferral; tax on the any income from foreign corporation is deferred til the same is distributed as a (return) dividend or repatriated by company to its U.S. shareholders.

Fact Element	Resources
Direct, indirect, and constructive ownership are used to determine whether a U.S. person is a U.S. Shareholder with respect to a foreign corporation, but only direct and indirect ownership are used to determine the percentage of stock owned by a U.S. Shareholder for purposes of computing its Subpart F inclusion.	IRC 951(a)(1) ,                                                             IRC 958(a) and (b),IRC 960
Stock in a foreign corporation that is owned directly by a foreign entity (such as a foreign corporation, foreign partnership or foreign estate) is considered to be owned indirectly by the shareholders, partners or beneficiaries of that foreign entity in proportion to their ownership in the foreign entity.

Under sec. 951A GILTI :Global intangible low-taxed income :The total gross income doesn't includ from the foreign base company income (as defined in section 954) and the insurance income (as defined in section 953) of such corporation by reason of section 954(b)(4).

Advantage in calculation of total income and loss Tested loss canbe claimed by corporation ,The term “tested loss” means, controlled foreign corporation for any taxable year of such controlled foreign corporation.The excess can be directly deducted from total gain (income).

Any Investment under CFC condition in the same company will be not taxed in current year.