At about 40:54, for future dividends, you indicate that the E&P can be reduced by the amount on which taxes were paid. This amount sounds like (GILTI income + the IRC 78 gross-up - the IRC 250 deduction = net taxable income). Is this the amount by which future dividends can be reduced to get to the future taxable dividend amount? Or, and this seems more intuitive, is the tax due on the (qualified) dividend reduced by the previous tax liability generated as a result of the section 962 election?
On the spreadsheet, why is the 951A+78 inclusion ($300k) added to the dividend income ($480k) to get $780k in total income? The tax on the $300k is computed on the "back end" and "forced" into the tax liability line on the 1040. I believe the only item that factors into taxable income for the purpose of computing tax liability is the actual dividend income of $480k. It seems the whole $780k was used to compute the tax liability of $246,788 but then only the portion attributable to the dividend (62% or $151,870) was factored in. It seems you used the $300k inclusion to find the pre-credit tax amount, but then excluded the portion thereof (since the tax was already computed separately (on Form 1118, actually). I would've thought the pre-credit tax liability would be based on only the $480k actual dividend (assuming no other non-CFC-related income, as you do). And then dividend income as a percentage of total taxable income would be 100%. I'd love to hear your thoughts. You're a gem. Thanks so much.
this video is better than the $1000 course I got on the AICPA.
Could you please let me know if it's possible to share the spreadsheet?
At about 40:54, for future dividends, you indicate that the E&P can be reduced by the amount on which taxes were paid. This amount sounds like (GILTI income + the IRC 78 gross-up - the IRC 250 deduction = net taxable income). Is this the amount by which future dividends can be reduced to get to the future taxable dividend amount? Or, and this seems more intuitive, is the tax due on the (qualified) dividend reduced by the previous tax liability generated as a result of the section 962 election?
I would alsoi love to get access to the spreadsheet
On the spreadsheet, why is the 951A+78 inclusion ($300k) added to the dividend income ($480k) to get $780k in total income? The tax on the $300k is computed on the "back end" and "forced" into the tax liability line on the 1040. I believe the only item that factors into taxable income for the purpose of computing tax liability is the actual dividend income of $480k. It seems the whole $780k was used to compute the tax liability of $246,788 but then only the portion attributable to the dividend (62% or $151,870) was factored in.
It seems you used the $300k inclusion to find the pre-credit tax amount, but then excluded the portion thereof (since the tax was already computed separately (on Form 1118, actually). I would've thought the pre-credit tax liability would be based on only the $480k actual dividend (assuming no other non-CFC-related income, as you do). And then dividend income as a percentage of total taxable income would be 100%.
I'd love to hear your thoughts. You're a gem. Thanks so much.