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Tax Readiness: How to comply with the new final stewardship regulations

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April 07, 2021

Overview

The December 2020 final foreign tax credit regulations introduced a stock-based asset apportionment methodology for all taxpayers. But given the timing of these final regulations, many taxpayers were forced to estimate their stewardship for provision purposes using the asset apportionment methodology used for interest expense. Since many taxpayers are past provision season, now is the time to consider how, under the new regulations, you can lower stewardship expenses, which may in turn improve your ETR, your foreign tax credit position and your foreign-derived intangible income (FDII) outcome.

On this podcast, our international tax and transfer pricing specialists discuss:

  • An overview of stewardship expense
  • The December 2020 final foreign tax credit regulations and their approach to the treatment of stewardship
  • Entities to which stewardship applies  
  • The default/residual method and the direct allocation method
  • Measuring US stock basis and characterizing the stock
  • The seven-step approach to calculating stewardship expense

The replay of the Tax Readiness: International tax planning post-election webcast is available here.

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Jonathan Swerling

US Tax Marketing Leader, PwC US

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