From Taxed to Tracked

In this episode of Inside International Tax, we explore the key concepts of the recently proposed previously taxed earnings and profits (PTEP) regulations and their practical impact on taxpayers.

On December 2, 2024, the U.S. Treasury Department and the IRS published proposed regulations addressing previously taxed earnings and profits (PTEP) of foreign corporations and related basis adjustments. These regulations come nearly six years after the issuance of Notice 2019-01, which announced the government’s intent to issue PTEP regulations taking into account international tax changes in the Tax Cuts and Jobs Act (the “TCJA”), and over seven years since the enactment of the TCJA.

In this episode, we explore the technical nuances and practical implications of the proposed regulations. How do they expand the successor rules?  What kind of tracking of PTEP is required?  How do the proposed regulations create the potential for noneconomic gains?  Which long-standing issues do the proposed rules address related to the repatriation of PTEP? How do the proposed regulations address the aggregate treatment of partnerships for purposes of subpart F and GILTI? What do the proposed regulations say about the timing of foreign currency gain or loss recognition in connection with CFC-to-CFC distributions? 

Join us as our host Gary Scanlon interviews his co-host Kristen Gamboa, as well as our guests Tim Chan, from the KPMG Washington National Tax - BTS Passthroughs Tax practice, and Gloria LaBerge, from the Washington National Tax - International Tax practice, to explore these issues and more.