Transition Tax Must be Completed Before October 15th

 In Tax News

The transition tax is not optional

The transition tax is law under Internal Revenue Code Section 965.  It cannot be avoided and must be reported with the 2017 tax return.  If you have been properly filing Form 5471, but do not file the transition tax, the IRS will have all the information to assess against you.  If you have not been filing Form 5471, this will compound the problem of non compliance and all issues should immediately be remedied.

 

October 15th deadline

The transition tax must be addressed before October 15th.  First, the election to pay the transition tax over 8 years must be filed by October 15th.  Also, the transition tax creates a potential double tax (see here), which could possibly be avoided with proper planning, but that planning may have to take place in 2018.

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