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Rhoades & Langer U.S. International Taxation and Tax Treaties
Copyright 2016, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

1-9 Rhoades & Langer, U.S. Int'l Tax'n & Tax Treaties 9.syn


Foreign Financial Asset Reporting


Rufus von Thulen Rhoades;Marshall J. Langer

Chapter Summary


A foreign sales corporation (FSC) is an ordinary foreign corporation with certain peculiar tax aspects. The FSC is subject to tax on certain portions of its income, is not subject to tax on other elements of its income and generates certain benefits for its corporate shareholders. The FSC normally generates three kinds of foreign trade income: (1) exempt foreign trade income, (2) nonexempt IRC Section 923(a)(2) foreign trade income, and (3) other nonexempt foreign trade income. Exempt foreign trade income is not subject to U.S. income tax and, even though the FSC is a foreign corporation, a dividend of that kind of income received by a domestic parent is entitled to a 100 percent dividends received deduction. That is the essence of the value of an FSC--it generates tax-free income to the parent corporation.

This chapter also covers how, after a great deal of discussion and negotiation, Congress repealed both the FSC legislation and the Extraterritorial Exclusion Act that replaced the FSC provisions.

Rhoades & Langer, U.S. International Taxation and Tax Treaties (Matthew Bender) is an authoritative source on the taxation of U.S. citizens doing business abroad and foreigners doing business in the U.S. This 6-volume set provides expert analysis of U.S. income tax treaties and other U.S. Tax Agreements. It also provides the full text of U.S. tax treaties and agreements, arranged in alphabetical order by country, with each country introduced by a handy "status sheet" that summarizes its agreements.


International taxation,foreign sales corporations,FSC,foreign trade income,exempt foreign trade income,nonexempt foreign trade income,Extraterritorial Exclusion Act,World Trade Organization,European Union,domestic production activities


For further discussion on topics related to the repeal of FSC legislation see Ch. 1, Fundamental Concepts; Ch. 3 Controlled Foreign Corporations (CFCs): Operations; Ch. 4, Controlled Foreign Corporations (CFCs): Constructive Distributions; Ch. 5, Controlled Foreign Corporations (CFCs): Sales or Reorganizations; Ch. 6, Personal Holding Companies; Ch. 10, Domestic International Sales Corporations; Ch. 17, Reorganizations Involving Foreign Corporations (IRC Section 367).


For extensive discussion of the latest tax and trade information for over 110 countries, see Foreign Tax and Trade Briefs (Matthew Bender).

For further discussion on obtaining the best tax advantages for a company or individual, see Tax Havens of the World (Matthew Bender).

For further information concerning formation and operation of various types of business entities, see Business Organizations with Tax Planning (Matthew Bender).
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