โ Scribed by Shirley Dennis-Escoffier
No coin nor oath required. For personal study only.
The IRS recently released what it described as the first in a series of notices that will provide detailed guidance for U.S. companies planning to repatriate earnings from foreign subsidiaries to take advantage of the one-time tax break added by the American Jobs Creation Act. Notice 2005-10 provides information on how to satisfy the domestic reinvestment plan requirements that will enable the repatriated funds to qualify for the special 85 percent dividend received deduction (DRD). The IRS said that repatriated funds can be used to increase capital spending, pay debt, and shore up pension plans, but they cannot be used to buy back stock, pay dividends, or fund executive compensation. This temporary provision can be elected for only one year, so eligible corporations must decide soon if they are to take advantage of this tax break.
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