Subpart F Income
Certain types of foreign income earned by Controlled Foreign Corporations that are taxed currently to US shareholders, regardless of distribution.
Detailed Explanation
Subpart F is an anti-deferral regime that prevents US owners of foreign corporations from sheltering passive or easily-shifted income offshore. Categories include foreign personal holding company income (interest, dividends, rents, royalties), foreign base company sales income, and foreign base company services income. US shareholders of CFCs include their pro rata share of Subpart F income on the current-year return. Subpart F operates alongside the GILTI regime, which captures certain remaining foreign income.
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Learn about International TaxationRelated Terms
GILTI (Global Intangible Low-Taxed Income)
A US tax on foreign income earned by Controlled Foreign Corporations in excess of a deemed routine return on tangible assets.
Form 5471 (Information Return of US Persons With Respect to Certain Foreign Corporations)
An informational return required of US persons who own or control foreign corporations, with significant penalties for failure to file.
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