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IRS Finalizes Sec. 695 Transition Tax

January 29, 2019

The U.S. Internal Revenue Service (IRS) issued final regulations on the Sec. 965 transition tax, which was added to the Code by the law known as the Tax Cuts and Jobs Act, P.L. 115-97. Sec. 965 applies to the last tax year of a deferred foreign income corporation (DFIC) that begins before Jan. 1, 2018. The Subpart F income of the corporation (determined for the tax year under Sec. 952) is increased by the greater of (1) the accumulated post-1986 deferred foreign income of that corporation determined as of Nov. 2, 2017, or (2) the accumulated post-1986 deferred foreign income of that corporation determined as of Dec. 31, 2017. Read more at the Journal of Accountancy.