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IC-DISC Strategies Update: Commissions, Complex Computations, IRS Audit Risks, Tax Savings Tactics

Webinar: ID# 1026348
Recorded CD or On-Demand
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About This Course:
This webinar will provide an updated guide to accounting professionals, tax advisers, and DISC administrators on the tax benefits and operational requirements of an Interest Charge-Domestic International Sales Corporation (IC-DISC).

The panel will review and explain the key strategic steps for establishing and running an IC-DISC, including calculating commissions, spotting IRS audit risks, and tackling the complex computations required.

The panel will also address recent IC-DISC developments and outline key IC-DISC tax planning opportunities, including using the optimal DISC ownership structure to maximize DISC benefits.
The IC-DISC remains the most significant U.S. income tax break for export businessowners.

The majority of IC-DISC companies are pass-through entities, either S corporations or LLCs. However, the benefits of the IC-DISC structure continue to be underutilized. Tax advisers must be well-versed in the tax, accounting and operational requirements after implementing IC-DISCs.

Establishing and operating an IC-DISC requires comprehensive tax planning to ensure that the DISC is meeting the IRS tests for determining qualified export assets and receipts and for ensuring distribution and interest amounts are accurately calculated. DISCs can achieve optimal tax benefits by utilizing available safe harbor pricing methods.

Advisers must also grasp the impact of the DISC’s ownership and entity structure in claiming tax benefits.

Listen as our panel of expert advisers, drawing from years of experience in IC-DISC structures, helps you deal with its tax challenges, including calculating commissions, anticipating IRS audit risk areas, improving liquidity for the parent and shareholders, and identifying optimal approaches to the computational requirements.

The program will provide tools to help ease the integration of DISC structures into current financial reporting systems.

Outline
  • IC-DISC overview
    • Applicable IRC sections
    • Tax court decisions and IRS guidance
    • Implementing an IC-DISC
    • IC-DISCs’ future
  • Updated IC-DISC ownership structures
    • Structuring and implementing IC-DISCs
    • Day-to-day operating issues
    • IRA ownership of IC-DISCs
    • Treaty country ownership of DISC
    • Related party DISC partnerships
    • Enhanced tax deferral opportunities
    • Saving disqualified IC-DISCs
  • Compliance and reporting
    • Pricing rules
    • Computational challenges
    • Calculating commissions
    • Transaction-by-transaction computations
    • Reg § 1.861-8 computations
    • Other issues
  • Challenges related to the dividend tax increase and 3.8% Medicare tax
  • Tax filings and common compliance pitfalls
Benefits

The panel will guide you through issues, including:
  • Maximizing unique IC-DISC tax benefits, including the tax benefits from different shareholder structures
  • Understanding tax liability for IC-DISC structures under the new federal dividend tax rate and Medicare tax
  • Improving liquidity for the parent and shareholders—steps to consider
  • Overcoming computational challenges
Learning Objectives

After completing this course, you will be able to:
  • Identify day-to-day operational challenges of using an IC-DISC
  • Decide on strategies to save disqualified IC-DISC structures
  • Establish the federal tax rules pertaining to IC-DISCs
  • Recognize the importance and method of calculating combined taxable income
  • Ascertain the various tax benefits that a DISC provides to its related supplier and shareholders
How To Access Course And Materials

Handout materials and the phone number for live presentations are made available to you one day prior to the event via email from the presenter. Copies of the presentations are included with recorded versions.
If you order a recorded version of the webinar, CDs will be mailed out approximately 10 days after the live event. Shipping is included in the price of recorded versions.

Continuing Education Credits Available

This program has been approved for 2.0 CPE hours through Strafford Publications. To obtain CPE credit, attendees must participate in the live event (recorded versions do not qualify for credit), return an Official Record of Attendance to Strafford affirming their participation (including the CPE code announced during the program), and pay a processing fee of $35 per person.

Strafford will mail a certificate of credit within approximately two weeks of receiving your completed Official Record of Attendance, provided all required conditions have been satisfied.

Strafford is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit.
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IC-DISC Strategies Update: Commissions, Complex Computations, IRS Audit Risks, Tax Savings Tactics
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