Form 8990, Section 163(j) Business Interest Expense for Form 5471
The
Section 163(j) Business Interest Expense
screens and computes were added to ONESOURCE Income Tax International for the 2022 tax year, with the options for calculating the CFC Group Election, to include the Section 163(j) Adjustment
in the calculation of Subpart F Income, and to transfer the calculated Section 163(j) Adjustment to the GILTI (Global Intangible Low Taxed Income)
tab. Tested Item Sourcing and Translation
was added for the 2023 tax year.Open a top consolidation. On the TAS menu, select
Foreign Tax Credit
, then FTC Defaults
.In the
Foreign Entity Section 163(j) Calculation
section. There are 5 compute options in the top consolidation.- Transfer to 163(j) Workpaper:
- This option transfers amounts fromIncome Sourcingto theSection 163(j) Business Interest ExpensetabAllowable Business Interest Expense,and
- transfers the calculated the amounts bySource Codeto theSection 163(j) Business Interest ExpensetabSection 163(j) Adjustment.
- Transfer to Form 8990 during US5471 Transfer
- Transfers toForm 8990in theOrganizerandTax Formsduring theTransfer to US5471compute.
- CFC Group Election
- CalculatesCFC Groups.
- Calculates amounts byCFC Group.
- Binder Properties, on the International tab, in theForeign Entity Typesection, if you haveNon-Controlled 10/50 Companyselected is a separateCFC Group.
- In Binder Properties on theInternationaltab, in theForeign Entity Typesection, if you haveForeign Partnershipselected the system does not calculateSection 163(j).
- Transfers§163(j) Interest Expense LimitationandSafe Harbor Electionin Organizer. Go to .
- Section 163(j) Adjustment – GILTI Computations
- Transfers the computed Section 163(j) Adjustments to theGILTI (Global Intangible Low Taxed Incometab on the Tested Item Sourcing and Translation line of the 5(ii) Section 163(j) Adjustment (Workpaper Only), and,
- Includes the Section 163(j) Adjustment in the calculation of the GILTI High Tax Exception during the Subpart F compute.
- Section 163(j) Adjustment – Subpart F Computations
- Includes the Section 163(j) Adjustment in the calculation of the Subpart F Income during the Subpart F compute.
Data sources
- Includes data fromIncome Sourcing and Interest Apportionment Information,Operating Assets, andBasis in Subsidiaries.
- Partner’s 163(j) Excess Items,S Corporation 163(j) Excess Items, andSafe Harbor Electiondon’t automatically populate.
- You can manually enter data in theSection 163(j) Business Interest Expenseor batch import it in the divisional consolidation or subsidiary.
- TheLock information transferred from International Computes to this tabprevents changes during Subpart F computes.
- After populating or updating data in the members, in the divisional consolidation perform a TAS Consolidate forFederal TAS, before computing the E&P, Look Through, and Subpart F.
Reports
Reports for
Section 163(j) Business Interest Expense
are in International Reports. Expand Subpart F Reports
to select the report.The Section 163(j) Allowable Business Interest Expense report has columns for Computed and Override amounts.
Form 5471, Form 8990 in organizer
The CFC’s Form 8990 default is not to have
suppress the transfer to Form 5471 Form 8990
selected as an INTL Transfer Options. This screen is located in the Organizer when you select . 
