Warning!! This is incredibly technical and is NOT for the “faint of heart”.
The 2017 TCJA - repealed IRC 958(d)(4). All of a sudden many corporation became CFCs.
The 2025 “OBBB” - The U.S. taxation of “U.S. Person” shareholders (whether individual or corporation) continues to become more complex. The “OBBB” created a new “form” of of Subpart F income. The is described in 951B. 951B is a direct reaction to the creation of “downward attribution” from a foreign person to a U.S. person. This was created by the repeal of 958(d)(4). In my attempt to understand the new 951B, I have taken a trip down “memory lane” to better understand how the repeal of 958(d)(4) resulted in the creation.
What follows is the AI description of the source used for the podcast.
Downward Attribution Under Section 958: Guidance and Considerations
1 source
This source provides an overview of the Tax Cuts & Jobs Act (TCJA) repeal of Section 958(b)(4), which eliminated the prohibition on downward attribution of stock ownership from non-U.S. persons to U.S. persons. The webinar materials explain how this repeal broadened the definition of a Controlled Foreign Corporation (CFC) and U.S. shareholder status, leading to unintended consequences for multinational businesses. It details proposed regulations (REG-104223-18) and Revenue Procedure 2019-40 issued by the IRS to address and mitigate some of these unintended impacts, particularly concerning reporting requirements (Form 5471) and the calculation of Subpart F and GILTI income. The presentation also discusses other areas affected, such as intercompany transactions, M&A considerations, and the portfolio interest exemption, offering insights into practical considerations for businesses.
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