What is QBAI?
A taxpayer’s QBAI are the assets used by the taxpayer in a trade or business that are depreciable under Section 167.
Income in excess of 10% of the QBAI is the Deemed Intangible Income of that taxpayer and to the extent this income is foreign sourced it is the taxpayer’s FDII..
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 …
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.
Does QBAI include inventory?
QBAI for a tax year is the average of the aggregate of adjusted bases in specified tangible property used in its trade or business and of a type with respect to which a Sec. … 167 depreciation deduction is allowable, assets such as inventory and land are not included.
What is the purpose of Fdii?
The 2017 Tax Act1 provides US companies with a new permanent deduction: Foreign-Derived Intangible Income (FDII). An incentive for C corporations to generate revenue from serving foreign markets, the provision applies a preferential tax rate to eligible income.
Who does Gilti apply to?
Applicability to U.S. taxpayers The GILTI rules apply to C corporations, S corporations, partnerships and individuals.