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Set up a consultation to explore how our expertise can offer insights and strategies, enhancing your federal income tax savings in ways you haven’t seen before.
Call Us: 857.453.1005
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UBIT and IC-DISC dividends – a caution for section 501(c) investors
/in News/by Paul FerreiraTax-exempt organizations often assume that dividend income is excluded from unrelated business taxable income. That is usually true under IRC section 512(b)(1), which excludes dividends, interest, annuities, and similar passive income from UBTI [2]. But IC-DISC investments are an important exception. An IC-DISC is generally not taxed at the corporate level; instead, its shareholders are […]
The 20-Percent Conversion-Cost Test and the IC-DISC
/in News/by Paul FerreiraForeign contract manufacturing can satisfy the 20-percent conversion-cost test, but that cuts both ways for IC-DISC purposes. If the foreign contractor’s work is treated as manufacturing because the seller’s contract price for that work equals at least 20 percent of the seller’s cost of goods sold or inventory amount for the property, the property has […]
R&D Apportionment and the IC-DISC – An Overlooked Variable in Export Tax Planning
/in News/by Paul FerreiraR&D apportionment can have a real impact on the value of an IC-DISC structure, but it is often overlooked. When an IC-DISC commission is computed under the combined taxable income method, research and development costs may reduce the income base used to determine the commission. For exporters with meaningful product development activity, that can directly […]