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Tag Archive for Qualified Dividend Income

Dividends From Foreign Corporations Part III – “Controlled Foreign Corporations”

As will be recalled from the previous blog posting that discussed so-called “Controlled Foreign Corporations” (CFC), a United States shareholder of a CFC can possibly be treated as having received “dividend” income at various times. These are when the US shareholder (i) has current income inclusions from the CFC under the anti-deferral regime (Subpart F income); (ii) has amounts actually distributed to him that had not been previously taxed as Subpart F income (these are ‘actual’ dividends); (iii) has amounts actually distributed to him that had been previously taxed as Subpart F income and (iv) recognizes gain on the sale of his CFC stock and the CFC has undistributed earnings and profits.

The question arises whether any of these amounts (i)-(iv), can be treated as “qualified dividend income”? Full details about the tax beneficial treatment of “qualified dividend Read more

Dividends from Foreign Corporations Part 2 – “Controlled Foreign Corporations”

As detailed in my last blog posting, “qualified dividend income” is taxed at beneficial lower tax rates and can be received from both domestic (US) corporations and certain “qualified” foreign (non-US) corporations. A “qualified foreign corporation” excludes a so-called “Passive Foreign Investment Company” or, PFIC. Subject to this limitation, the term “qualified foreign corporation” means any foreign corporation that is incorporated in a possession of the United States or that is eligible for the benefits of a comprehensive US income tax treaty which the IRS has determined is satisfactory for qualified dividend purposes. In addition, a foreign corporation will be treated as a “qualified’ with respect to any dividend paid by the corporation on stock which is readily tradable on an established securities market in the United States. The Internal Revenue Code does not exclude a so-called “controlled foreign corporation” Read more

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