Transition Tax
on overseas
retained earnings

 

IRC 965 Transition Tax Statement

A person that has income under section 965 of the Code for its 2017 taxable year is required to include with its return an IRC 965 Transition Tax Statement, signed under penalties of perjury and, in the case of an electronically filed return, in Portable Document Format (.pdf) with a filename of “965 Tax”. The IRC 965 Transition Tax Statement must include the following information:

  • The person’s total amount required to be included in income under section 965(a) of the Code.
  • The person’s aggregate foreign cash position, if applicable.
  • The person’s total deduction under section 965(c) of the Code.
  • The person’s deemed paid foreign taxes with respect to the total amount required to be included in income by reason of section 965(a).
  • The person’s disallowed deemed paid foreign taxes pursuant to section 965(g).
  • The total net tax liability under section 965 (as determined under section 965(h)(6), without regard to whether such paragraph is applicable), if applicable, which will be assessed.
  • The amount of the net tax liability under section 965 to be paid in installments under section 965(h) of the Code, if applicable.
  • The amount of the net tax liability under section 965, the payment of which has been deferred, under section 965(i) of the Code, if applicable.
  • A listing of elections under section 965 of the Code or the election provided for in Notice 2018-13 that the taxpayer has made, if applicable.

Adequate records must be kept supporting the section 965(a) inclusion amount, deduction under section 965(c) of the Code, and net tax liability under section 965, as well as the underlying calculations of these amounts.  Moreover, additional reporting may be required when filing returns for subsequent tax years, and the manner of reporting may be different. 

Download model statement for the IRC 965 Transition Tax Statement

Source: Internal Revenue Service (IRS)

 

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