What does QBAI stand for?
taxpayer’s Qualified Business Asset InvestmentParticularly, FDII is income that is more than 10% of a taxpayer’s Qualified Business Asset Investment or QBAI.
A taxpayer’s QBAI are the assets used by the taxpayer in a trade or business that are depreciable under Section 167..
What is QBAI tax?
In effect, it is a tax on earnings that exceed a 10 percent return on a company’s invested foreign assets. … The 10 percent qualified business asset investment (QBAI) exemption in GILTI attempts to target the provision at assets that return above-normal returns, which is a proxy for the returns to intellectual property.
What is included in QBAI?
QBAI means the average of a tested income CFC’s aggregate adjusted bases as of the close of each quarter of a CFC inclusion year in specified tangible property (below) that is used in a trade or business of the tested income CFC and is of a type with respect to which a deduction is allowable under Code Sec. 167.
How is QBAI calculated?
When a tested income CFC has a CFC inclusion year of less than 12 months, the CFC’s QBAI is the sum of the aggregate adjusted bases in its specified tangible property at the close of each full quarter divided by four (quarters in a year), plus the aggregate adjusted bases in the specified tangible property at the close …
Who qualifies for Fdii?
Under the FDII proposed regulations, a related-party sale of general property qualifies as FDDEI only if either (1) the foreign related party resells the property to an unrelated foreign person (either on its own or as a component part of other property), or (2) the seller reasonably expects the property to be used in …
Who does Gilti apply to?
The GILTI rules (contained in the new section 951A) require a 10 percent U.S. shareholder of a controlled foreign corporation (CFC) to include in current income the shareholder’s pro rata share of the GILTI income of the CFC. The GILTI rules apply to C corporations, S corporations, partnerships and individuals.