Section 962 is a special election available to individual US shareholders of controlled foreign corporations. It allows individuals to use Subchapter C corporate tax principles to report income from CFCs and foreign tax credits for CFC-paid foreign income tax. It is a valuable technique for American individuals living abroad who own regular businesses in normal countries to reduce their US tax burden.
Learning Objectives
• Identify the results of a Section 962 election
• Determine whether the Section 962 election will benefit your taxpayer
Major Topics
• Form 5471
• Controlled foreign corporation
• Section 962
• Subchapter C
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