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Foreign entity returns

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 from
      Income Sourcing
       to the
      Section 163(j) Business Interest Expense
      tab
      Allowable Business Interest Expense,
       and
    • transfers the calculated the amounts by
      Source Code
       to the
      Section 163(j) Business Interest Expense
      tab
      Section 163(j) Adjustment
      .
  • Transfer to Form 8990 during US5471 Transfer
    • Transfers to
      Form 8990
       in the
      Organizer
       and
      Tax Forms
       during the
      Transfer to US5471
       compute.
  • CFC Group Election
    • Calculates
      CFC Groups
      .
    • Calculates amounts by
      CFC Group.
    • Binder Properties
      , on the International tab, in the
      Foreign Entity Type
       section, if you have
      Non-Controlled 10/50 Company
       selected is a separate
      CFC Group
      .
    • In Binder Properties on the
      International
       tab, in the
      Foreign Entity Type
       section, if you have
      Foreign Partnership
       selected the system does not calculate
      Section 163(j).
    • Transfers
      §163(j) Interest Expense Limitation
      and
      Safe Harbor Election
      in Organizer. Go to
      Foreign Information
      Foreign Corporation
      Foreign Corporation
      [Name of CFC Group Parent]
      §163(j) Interest Expense Limitation
      Specified Group Parent
      .
  • Section 163(j) Adjustment – GILTI Computations
    • Transfers the computed Section 163(j) Adjustments to the
      GILTI (Global Intangible Low Taxed Income
       tab 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

  1. Includes data from
    Income Sourcing and Interest Apportionment Information
    ,
    Operating Assets
    , and
    Basis in Subsidiaries
    .
  2. Partner’s 163(j) Excess Items
    ,
    S Corporation 163(j) Excess Items
    , and
    Safe Harbor Election
     don’t automatically populate.
  3. You can manually enter data in the
    Section 163(j) Business Interest Expense
     or batch import it in the divisional consolidation or subsidiary.
    1. The
      Lock information transferred from International Computes to this tab
       prevents changes during Subpart F computes.
  4. After populating or updating data in the members, in the divisional consolidation perform a TAS Consolidate for
    Federal 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
Foreign Information
Foreign Corporation
Foreign Corporation
[Name of CFC Group Parent]
.

This article applies to:

  • PRODUCT: ONESOURCE Income Tax
  • Return type: international

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