![]() ![]() If the answer to the GILTI equation is positive then this is the income to be included in the US shareholders taxable income. If the Net CFC Tested Income exceeds 10% of the QBAI, adjusted for interest expense, the US shareholder may have an income inclusion. It is necessary to determine the Net CFC Tested Income and the QBAI of the CFC and the attributable interest expense. In some cases this calculation is simple in others it is not. If the interest expense taken exceeds the interest income included in determining tested income an adjustment is needed. Interest expense adjustment relates to the ultimate net income expense inclusion related to the shareholder’s Net CFC Tested Income.Qualified Business Asset Investment (QBAI) is the average at each quarter end of the aggregate adjusted bases in tangible property used in the trade or business and depreciable property.Net CFC Tested Income is the sum of each CFC Tested Income less the sum of each CFC Tested loss. Tested Income is the gross income of the CFC with certain adjustments including appropriately allocated expenses. ![]()
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