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Dual Consolidated Losses: New Proposed Regulations

A live 110-minute CPE webinar with interactive Q&A

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Friday, November 22, 2024 (Tomorrow)

1:00pm-2:50pm EST, 10:00am-11:50am PST

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This webinar will review the fundamentals of the dual consolidated loss (DCL) rules under IRC Section 1503(d) to global entity structures and the effect of the new proposed regulations on existing structures for international companies and their advisers. Our panel of international mergers and acquisitions strategists will present examples and scenarios applying the existing and proposed guidelines.

Description

Some companies with dual-resident status are treated as domestic entities in the U.S. and abroad; a U.S. domestic entity may operate through branches or units in foreign countries or two domestic U.S. corporations filing a consolidated return could generate net operating losses deductible in two countries. IRC Section 1503(d) DCL rules and the related regulations were enacted to prevent entities operating in the U.S. and abroad from double-dipping net operating losses.

In August 2024, proposed regulations REG-105128-23 were issued to recognize and work with the Pillar II rules and the 15 percent minimum global tax. These rules clarify that a tax intended to ensure a minimum tax rate is an income tax and state that a qualified domestic top-up tax and an income inclusion rule can be considered an income tax. They also explain the interaction of DCL with intercompany transactions, eliminate certain stock sales from DCL, and incorporate other significant changes. Multinational tax advisers must grasp the DCL rules and understand the implications of the new proposed regulations.

Listen as our panel of international tax experts reviews the existing DCL rules and the impact of the recently proposed regulations.

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Outline

  1. Dual consolidated losses: introduction
    1. Overview
    2. Key definitions
    3. Calculation of DCLs
    4. Foreign use
    5. Domestic use limitation
    6. Domestic use election and triggering events and exceptions
  2. Proposed regulations
    1. Disregarded payment rules
    2. Income with respect to stock
    3. Books and records “clarification”
    4. Pillar II
    5. Intercompany transactions

Benefits

The panel will cover these and other critical issues:

  • Entities subject to IRC Section 1503(d) DCL rules
  • Proposed regulations REG-105128-23 and their impact

Faculty

Feinstein, Neil
Neil Feinstein
Managing Director, National Tax Office, International Tax Service
BDO USA

Mr. Feinstein has over 30 years of experience in advising multinational companies and large privately held companies on...  |  Read More

Masciangelo, Michael
Michael Masciangelo, CPA
Tax Partner; International Tax Services Practice Leader
BDO USA

Mr. Masciangelo is responsible for international tax strategy development, including working with the firm’s U.S....  |  Read More

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