There were 61,820 domestic corporations each controlled by a foreign person for Tax Year 2005. These foreign-controlled domestic corporations (FCDCs) were relatively few in number, accounting for just 1.1 percent of all U.S. corporations. However, these corporations generated $3.5 trillion of total receipts with $9.2 trillion of total assets, accounting for 13.7 percent of the receipts and 13.9 percent of the assets reported on all U.S. corporation income tax returns.
For Tax Year 2004, foreign corporations controlled by U.S. multinational corporations held $9.2 trillion in assets and reported $3.8 trillion in receipts. More than three-fourths of the 74,676 controlled foreign corporations (CFCs) were concentrated in the services (31.4 percent), goods production (25.9 percent), and distribution and transportation of goods (21.7 percent) industrial sectors.
For 2004, corporations that filed a U.S. tax return claimed foreign tax credits worth $56.6 billion, representing an all-time high and a 13.2-percent increase over the previous high amount in 2003. The 5,502 corporations that claimed a foreign tax credit reduced their U.S. tax on worldwide income by 30.2 percent, from $187.5 billion to $130.9 billion. Other credits, including the general business credit and the possessions tax credit, further reduced their U.S. tax on worldwide income to $118.9 billion.
Between 2002 and 2005, the total number of partnership returns for the United States increased 23 percent, from 2,336,313 to 2,873,194, as tabulated from tax and information returns by the Bureau of Economic Analysis (BEA). During this period, the Southeast region experienced the fastest growth, 36.1 percent. Florida was the fastest growing State in this region, with an increase of 34,623 in the number of partnership returns, or 79.2 percent over the period. Georgia, North Carolina, and Virginia also contributed significantly to the growth of the region. In 2005, the Southeast also held the greatest share of the total number of partnership returns in the nation, 12.1 percent. The Great Lakes region experienced the slowest growth from 2002 to 2005, 21.9 percent.
A total of 261,104 Federal gift tax returns was filed for gifts given in 2005, predominantly by wealthy Americans. A total of $38.5 billion in assets was transferred from donors to donees, or gift recipients. Only 2.9 percent of returns were taxable, with $1.7 billion in gift tax liability reported. Females represented 47.3 percent of the donee population, while males represented 46.3 percent. The remaining 6.4 percent represented trusts and donees with unknown identities.
The Economic Recovery Tax Act of 1981 first introduced the credit for increasing research activities. Key modifications to the calculation of the credit were made in the next decade. The Omnibus Budget Reconciliation Act of 1989 instituted gross receipts as a factor in calculating the credit starting in Tax Year 1990. Six years later, the Small Business Job Protection Act of 1996 added the Alternative Incremental Credit calculation method to the existing Regular Credit calculation method.