Questions on the Transition Tax

Questions covered included:

• Who does the transition tax affect?
• In which cases would the transition tax apply to non-corporate US shareholders, including individuals?
• How is the transition tax calculated?
• Is there any way to lessen the burden imposed by this transition tax?
• Will the imposition of this mandatory transition tax lead to any cases of double taxation?
• Can foreign tax paid on dividends out of the CFC be used to offset the transition tax?
• How will the transition tax affect renunciations of US citizenship?
• Are there any ways to use existing tax treaties to argue that the transition tax should not apply?
• What impact could this tax have if applied to non-resident individuals who are US shareholders of CFCs? More specifically, what is the impact on the individual? And what is the impact on the tax base of the country where the CFC is incorporated (the local economy)?
• Recent news articles unsurprisingly indicate that the impact of the transition tax could be devastating for affected taxpayers. Is it really that bad at the coalface? And how will clients handle this?
• Can anyone demonstrate how the tax would be calculated after reviewing a balance sheet?
• Will cryptocurrencies such as Bitcoin be considered cash equivalent in terms of transition tax calculations?