TaxConnections

Ask Tax Question

What is a controlled foreign corporation?

International Tax Controlled Foreign Corporation
TaxConnections Members... Answer This Question Want To be One of Our Tax Experts? Register Here

Tax Professional Answers

User Photo
Douglas Stransky
Under Internal Revenue Code section 957(a), a controlled foreign corporation ("CFC") is defined as a foreign corporation in which, on any day of its tax year, greater than 50% of the voting power or value of its stock is owned by U.S. shareholders.

Code section 951(b) defines a U.S. shareholder as any U.S. person who owns 10% or more of the total combined voting power of all classes of stock of the foreign corporation.
Leave a Comment 214 weeks ago

User Photo
Hope Shoulders, Esq.
In addition to the advice provided, I would also like to add two points. One, a "U.S person" can be a citizen, resident or a domestic corporation, partnership, trust or estate. And two, in determining whether a U.S. person is a U.S. shareholder, actual, indirect and constructive ownership rules apply.

Indirect ownership, in general, consists of stock beneficially owned by a U.S. person through a foreign corporation, partnership, trust and estate. I.R.C. § 958(a)(2).

In general, constructive ownership treats stock owned by an individual as owned by his or her spouse, children, grandchildren and parents. I.R.C. § 318.
Reply 212 weeks ago


Meet Leading Tax Advisors

User Photo Kathryn Morgan

Bossier City, Louisiana, USA

Enrolled Agent, Master Tax Advisor

User Photo Peter J. Scalise

New York, New York, USA

Federal Tax Credits & Incentives Practice Leader

User Photo John Stancil

Lakeland, Florida, USA

Tax Advisor/CEO

User Photo John Dundon, II EA

Denver, Colorado, USA

Tax Director

User Photo Steven Potts JD EA IAR

Fullerton, California, USA

Principal

User Photo Devon McCarthy FCCA, EA

Sanford, Florida, USA

President

User Photo Caran Ebert, CPA

Topanga, California, USA

Tax Advisor

User Photo Lisa Nason CPA, MST

Greenville, South Carolina, USA

Managing Shareholder

User Photo Gary Carter, PhD, MT, CPA

Edina, Minnesota, USA

President

User Photo NEERAJ BHATIA, CPA

Santa Clara, California, USA

Tax Principal - President

User Photo Bill Robinson, CPA

Chattanooga, Tennessee, USA

Owner

User Photo Hugo Van Zyl

Stellenbosch, South Africa

Exchange Control & Master Tax Practitioner (SA)

User Photo Douglas Stransky

Boston, Massachusetts, USA

Tax Partner, International Tax

User Photo Larry Stolberg, CPA, CA

Toronto Mississauga Oakville Burlington Hamilton, Canada

Tax Specialist

User Photo Dr. Daniel Erasmus

West Palm Beach, Florida, USA

Managing Partner/EMEA

View/Select our Current List of Tax Topics

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Previous PageNext Page

Contact Us Today