Beginning Balances - E&P and Taxes for Tax Year 2009 and Earlier

Entering Pre-87 Data

Manually Entering Post-86 Adjustments

On the TAS navigation tree, select the
Foreign Entity | Beginning Balances - E&P and Taxes
.
Select
Post-86 Earnings and Profits
.
Expand
Adjustments
.
Enter the
Tax Year - Begin
date (MMDDYYYY) for the start of the tax year.
Enter the
Tax Year - End
date (MMDDYYYY) for the end of the tax year.
Select a
Basket
from the list of system and user-defined baskets.
Select the
Section 959(c) Class
from the dropdown that designates whether the earnings and profits have been previously taxed.
Select either
Own
or
Sub
from the dropdown.
Enter the
E&P Adjustment
which is the functional currency earnings and profits adjustment that is being made for the basket and year.
If the adjustment is for a class of previously taxed income, enter the
U.S. Dollar equivalent
for the adjustment.
Enter the
U.S. Dollar tax adjustment
amount that needs to be made for the basket and year.
Enter a description for the adjustment.
Click
Apply
then
OK
to save the changes and exit.
The data entry for Pre-87 Adjustments is identical to the steps described above, except the year must fall before 1987.

Entering the U.S. Dollar Basis for Previously Taxed Income

On the navigation menu, select
Foreign Entity > Beginning Balances - E&P and Taxes >
PTI in US$
.
Enter the total
U.S. Dollar
equivalent.
Click
Save
and
Close
.

Table of Non-Editable Blue Fields on the PTI in US$

Beginning Balances - E&P and Taxes Tips

Use the
Post-86
or
Pre-87
Adjustment
tab, if you must make an adjustment to the E&P pools or tax pool. This maintains the historical accuracies of the E&P while allowing for corrections to the pool balances. Any adjustments made in one year will be included with the other beginning balances amounts when a binder is rolled over from one year to the next.
When a dividend is paid from a lower tier subsidiary to an upper tier foreign corporation, the system automatically updates the Post-86 and Pre-87 E&P and taxes for that dividend payment. Ending balances for E&P and taxes are rolled forward into the next year.
Although Post-86 E&P is treated as a pool during calculations, the system allows you to enter information for specific tax years to facilitate tracking of additions and distributions out of the pool. However, historical E&P and taxes could be input as one aggregate entry instead.
If the Section 959(c) class is previously taxed income, then the Earnings and Profits amount must be positive.
When entering both Post-86 pools and Pre-87 layers earnings and profits should be entered in the same functional currency as the entity.
Enter Post-86 taxes in US Dollars.
Enter Pre-87 taxes in functional currency.
When entering the US $Basis in PTI, the U.S. dollar amount is the previously taxed income (PTI) translated at the weighted average rate in the year of the Subpart F inclusion or at the year-end rate in the year of the Section 956 inclusion.
The amount of exchange gain/loss is computed as the difference between the distribution attributable to PTI translated at the spot rate on the distribution date and the U.S. dollar basis of PTI (prorated shares of the previous inclusion amount of PTI [Total U.S. Dollar previous inclusion amounts * actual dividend from PTI/ Total PTI before distribution]). The detail behind this calculation can be found in the Post 86 or Pre-87 PTI Exchange Gain/Loss Report.