Individuals who own what percentage or more of stock in a foreign corporation are subject to the Transition Tax?

The Transition Tax applies to U.S. shareholders who own 10% or more of the stock in a foreign corporation. This tax is part of the Tax Cuts and Jobs Act, which aimed to transition the U.S. tax system towards a territorial system conducive to global business operations. The key concept here is the definition of a "U.S. shareholder." A U.S. shareholder is any person who owns 10% or more of the total combined voting power of a foreign corporation. This threshold is significant because it establishes which individuals are liable for including their share of the foreign corporation's income in their own tax calculations, thereby affecting their overall tax liability in the U.S. Determining whether an individual qualifies as a U.S. shareholder under this provision is crucial for compliance with the Transition Tax regulations.