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Has anyone done a 962 election in regards to GILTI (Form 8992) for an individual? Per the instructions it states to use Form 1118 specifically. Any help is appreciated!

gregorylucyshyn
Level 1

Instructions state to use Form 1118, which doesn't appear to be an option.  It does allow me to input the 962 tax (21%) on GILTI income.  

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4 Replies 4
edyankcpa
Level 1
Greg, Have you found out any information on this yet? I have a client that is subject to the Gilti tax as well and per my understanding, by filing a 962 election, it can be taxed at 1/2 the corporate rate of 10.5% and further be reduced by any foreign tax attributed to this income. The question seems to be what exactly do you need to put in the election and how is it reported on the return. Proconnect has a field where you can enter the 962 tax and the election (under Other Taxes, Schedule J). The tax then flows to Form 1040 Line 11 and a statement. In this case, does form 8992 not need to be used? I would appreciate if you could pass on any information you found out about this.
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qwertyui
Level 3

Also need answer for this :D. Have you found the solution?

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lorlaur
Level 1

I am in the same boat.  I think you need to fill out form 1120 (proforma) for the individual, which includes forms 1118, 8992, and 8993 and keep this for your tax calculation and FTC backup. These figures are then entered into 1040.  I had also filed the 8992 at the individual level and for lack of guidance, I made an entry to other income to back out the GILTI income that flows from form 8992 with a reference to "GILTI taxed at Corp rates-See 982 tax on Sch. 2.

 

 

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MicheleOleson
Level 1

I have prepared a 962 election for an individual but its pretty manual with a somewhat rough implementation.   What you do is to go to screen 45.3 under other taxes.  The box called Section 962 tax should be the credit you compute and should be negative.  Otherwise, the system thinks it is additional tax, double counts it and doesn't re-compute it.   You have to manually tell them what to credit.   There is a popup box under that for you to enter your election language.    The election shows up on the top of page two of return.

 

I used something like this.

 

Form 962(a)1 Election

The taxpayer hereby makes an election under Section 962(a)(1) to be taxed on amounts included in the taxpayer’s gross income under section 951(a) as if the individual were a Subchapter C corporation for the 2019 tax year.

 

Income reported under Section 951(a) for 2019:

 

                Section 956 Inclusion _________  Inc.                                     XXXXXXX

                Section 956 Inclusion __________                                           XXXXXXX

                Global Intangible Low-Taxed Income                                       XSXXXXX

 

Total Income Reported Under 951(a) for 2019                                      XXXXXXXX

 

Tax at 37% Marginal Rate                                                           XXXXXXX

 

Tax at 21% Corporate Rate                                                           XXXXXXXXX

 

 Tax Savings from Election                                                             XXXXX

 

I hope this helps.    

 

 

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