The IRS posted “early draft releases” of schedules that, if finalized, would be used to report information with respect to Form 965 about the “transition tax” imposed under section 965.
Section 965 was added to the Code by the new U.S. tax law (Pub. L. No. 115-97, enacted December 22, 2017) as a transition rule to effect the participation exemption regime. The transition rule includes a participation exemption, the net effect of which is to tax a U.S. shareholder’s “mandatory inclusion” amount at a rate of 15.5% to the extent it is attributable to the shareholder’s aggregate foreign cash position or otherwise at a rate of 8%.
Previously, the IRS provided the following drafts of:
Drafts of the following schedules for Form 965 have been posted with a “watermark” date of September 5, 2018. These drafts also include cautionary language that they are not to be used for filing purposes, and are subject to change and to OMB approval before being officially released.
The IRS has not yet released a draft version of the instructions for Form 965 or the related schedules.
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