WebJun 1, 2024 · 338(g) election: Deemed asset sale can produce Subpart F income and GILTI, which will be taxable to the seller as if the CFC’s year closed on the day of the deemed sale. That inclusion will increase the seller’s stock basis and create PTI, the seller will recognize stock sale gain, and Section 1248 will apply and 245A will apply to the ... WebSep 11, 2024 · The domestic corporation would recognize $500 of taxable gain on the sale (because its initial $100 basis in CFC1 is increased to $500 as a result of the previously …
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WebUnder Section 1248(a), 2 gain recognized on a U.S. shareholder’s 3 disposition of stock in a CFC is treated as dividend income to the extent of the relevant earnings and profits accumulated ... Web− CFC 1 recognizes gain on the sale to CFC 2, and CFC 2 gets an amortizable fair market value basis in the IP − If the gain was recognized prior to CFC 1 being subject to GILTI, the gain was thought to not be required to be included in US shareholder income, however GILTI regulations include an anti-abuse provision denying the tempaper wayfair
Sec. 1245 Recapture Rules Can Apply to Stock - The Tax Adviser
WebFinally, §1248 provides special rules for the sale of CFC stock by a U.S. shareholder. These rules have the effect of recharacterizing capital gain as ordinary income to the extent of the shareholder’s pro rata portion of the accumulated earnings and profits that have not been taxed under Subpart F. Table of Contents I. Introduction II. WebJul 1, 2024 · If the reduction exceeds the adjusted tax basis in the specified stock immediately before the disposition, the excess is treated as gain from the sale or exchange of the stock in the tax year in which the disposition occurs. WebFeb 1, 2024 · On Oct. 19, US1 sells all of its CFC stock to US2 for $100 in a transaction in which US1 recognizes $90 of gain. Under Sec. 1248(a), … tempaper feather flock