- FOREIGN INCOME & TAXPAYERS
IRS issues Q&As on Sec. 965 transfer and consent agreements
- International Tax
- IRS Practice & Procedure
Editor: Mark G. Cook, CPA, CGMA
As a result of the enactment of the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, the United States switched from a global to a territorial tax system, and certain U.S. taxpayers who held ownership in foreign entities were subject to a one-time Sec. 965 transition tax on untaxed foreign earnings. The IRS provided affected taxpayers various elections for paying this tax, including paying it in installments under Sec. 965(h) or deferring payment for S corporation shareholders under Sec. 965(i) until specific acceleration or triggering events occur. Even if such an event should occur, the IRS alleviates the tax burden by allowing transfer and consent agreements if the requirements are met. On June 27, 2019, the IRS released further guidance through its question-and-answer (Q&A) webpage (available at www.irs.gov ) to further recap and clarify the rules for transfer and consent agreements set forth in Secs. 965(h) and (i) and Regs. Secs. 1.965-7(b) through (c).
Background: Sec. 965
Sec. 965 generally applies to U.S. shareholders, as defined under Sec. 951(b), in certain specified foreign corporations. A specified foreign corporation is either a controlled foreign corporation (CFC) or a foreign corporation with a corporate U.S. shareholder (Sec. 965(e)(1)). To the extent the foreign corporation has accumulated post-1986 earnings and profits that have not been previously taxed by the United States, Sec. 965 requires the U.S. shareholder to pay a transition tax on those earnings as of Nov. 2, 2017, or Dec. 31, 2017, in the foreign corporation's last tax year beginning before Jan. 1, 2018, as if the earnings had been repatriated to the United States.
Under Sec. 965(h), the taxpayer can elect to pay its Sec. 965 net tax liability in installments over eight years. The installment amounts are as follows: 8% of the tax for the first five installments, 15% for the sixth installment, 20% for the seventh installment, and 25% for the eighth and final installment (Sec. 965(h)(1)). However, if an acceleration event occurs, the unpaid portion of all the remaining installments becomes due. An acceleration event is:
- An addition to tax for failure to timely pay any required installment;
- A liquidation, sale, exchange, or disposition of substantially all of the taxpayer's assets, including in bankruptcy;
- A cessation of business by a person that is not an individual;
- An event that results in a person no longer being a U.S. person, including a resident alien becoming a nonresident alien;
- A person's becoming a member of a consolidated group;
- A consolidated group's ceasing to exist; or
- A determination by the IRS that an acceleration event has occurred because of a material misrepresentation in a transfer agreement.
An exception to this rule applies if the acceleration event is a covered acceleration as defined in Regs. Sec. 1.965-7(b)(3)(iii)(A)(1), and an eligible Sec. 965(h) transferor and an eligible Sec. 965(h) transferee (as defined in Regs. Sec. 1.965-7(b)(3)(iii)(B)(1)) enter into a transfer agreement with the IRS.
Under Sec. 965(i), a special rule applies to S corporation shareholders and allows the taxpayer to elect to defer the Sec. 965 net tax liability with respect to any S corporation that was a U.S. shareholder subject to Sec. 965. The taxpayer continues to defer the tax until a triggering event occurs. Sec. 965(i)(2)(A) and Regs. Sec. 1.965-7(c)(3)(ii) describe a few triggering events:
- The corporation ceases to be an S corporation;
- There is a liquidation, sale, exchange, or disposition of substantially all of the S corporation's assets;
- There is a cessation of business by the S corporation;
- The S corporation ceases to exist; or
- There is a transfer of any share of S corporation stock by the shareholder.
At the time of the triggering event, the entire amount of the deferred tax liability will be due unless (1) in the case of a stock transfer described in Sec. 965(i)(2)(A)(iii), a transfer agreement is entered into by an eligible transferor and an eligible transferee for stock transfers (Sec. 965(i)(2)(C)); or (2) the S corporation shareholder makes a Sec. 965(h) election to pay the transition tax over eight annual installments instead of immediately (Sec. 965(i)(4)). For specific triggering events described in Sec. 965(i)(2)(A)(ii), such as a liquidation or cessation of business, the Sec. 965(h) election can be made only with the IRS's consent (Sec. 965(i)(4)(D)).
Transfer agreements under Secs. 965(h)(3) and 965(i)(2)(C)
Regs. Secs. 1.965-7(b)(3)(iii)(B) and 1.965-7(c)(3)(iv)(B) highlight the requirements necessary to make a valid transfer agreement for Sec. 965(h)(3) and Sec. 965(i)(2)(C) purposes. The transfer agreement must be timely filed within 30 days of the acceleration or triggering event, and a copy of the agreement must be attached to both the transferor's and transferee's tax returns (Regs. Secs. 1.965-7(b)(3)(iii)(B)(2) and 1.965-7(c)(3)(iv)(B)(2)). In addition, the agreement must be signed under penalties of perjury by the appropr iate parties (Regs. Secs. 1.965-7(b)(3)(iii)(B)(3) and 1.965-7(c)(3)(iv)(B)(3)).
The agreement must be titled "Transfer Agreement Under Section 965(h)(3)" or "Transfer Agreement Under Section 965(i)(2)" (see Regs. Secs. 1.965-7(b)(3)(iii)(B)(4) and 1.965-7(c)(3)(iv)(B)(4)), and the terms must include the following:
- A statement that the transferee assumes the transferor's liability;
- A statement that the transferee (and, if applicable, the transferor) agrees to comply with all the conditions and requirements of the appropriate Code sections and Treasury regulations;
- The name, address, and taxpayer identification numbers (TINs) of the transferor and transferee;
- The amount of unpaid remaining net tax liability or unpaid deferred net tax liability for Sec. 965(h) and Sec. 965(i), respectively;
- A copy of the transferor's most recent Form 965-A, Individual Report of Net 965 Tax Liability , or Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts , as applicable;
- A detailed description of the acceleration or triggering event;
- A representation that the transferee is able to pay the net tax liability being assumed;
- If the transferor continues to exist, an acknowledgment that the transferor and any successor will remain jointly and severally liable for the net tax liability;
- A statement as to whether the leverage ratio of the transferee and its affiliated group members after the event exceeds 3-to-1;
- For Sec. 965(h) purposes, a certification by the transferee waiving the right to a notice of liability and consenting to the immediate assessment of the remaining unpaid net tax liability; and
- Any additional information, representation, or certification required by the IRS in publications, forms, instructions, or other guidance.
Consent agreements under Sec. 965(i)(4)(D)
Regs. Sec. 1.965-7(c)(3)(v)(D) highlights the various requirements necessary to make a valid consent agreement for Sec. 965(i)(4)(D) purposes. Besides making a timely Sec. 965(h) election on the tax return and timely payment of the first installment, the consent agreement must be timely filed within 30 days of the triggering event, and a copy of the agreement must be attached to the shareholder's tax return (Regs. Sec. 1.965-7(c)(3)(v)(D)(2)). In addition, the shareholder must sign the agreement under penalties of perjury (Regs. Sec. 1.965-7(c)(3)(v)(D)(3)).
The agreement must be titled "Consent Agreement Under Section 965(i)(4)(D)" (see Regs. Sec. 1.965-7(c)(3)(v)(D)(4)), and the terms must include the following:
- A statement that the shareholder agrees to comply with all the conditions and requirements of the appropriate Code sections and Treasury regulations;
- The name, address, and TIN of the shareholder;
- The amount of unpaid deferred net tax liability for Sec. 965(i);
- A representation that the shareholder is able to pay the net tax liability;
- A statement as to whether the leverage ratio of the shareholder and all subsidiary members of its affiliated group after the event exceeds 3-to-1; and
New guidance from IRS Q&As and observations
The IRS released new Q&As related to transfer and consent agreements that emphasize the more practical issues a taxpayer may encounter and provided citations to the primary source materials as discussed earlier.
Under Q&As No. 2, No. 3, and No. 5, the IRS indicates that a transfer or consent agreement should be filed with the IRS's Memphis Compliance Service Collection Operations at Memphis CSCO, 5333 Getwell Road MS 81, Memphis, TN 38118. All agreements will be considered timely filed only if they are filed within 30 days of the acceleration or triggering event date. However, for the death of a Sec. 965(i) transferor and related triggering event, the transfer agreement may be filed by the unextended due date of the transferor's final tax return (Regs. Sec. 1.965-7(c)(3)(iv)(B)(2)(iii)).
The IRS emphasizes the consent agreement must be filed by the S corporation shareholder, not the S corporation, as the affected taxpayer is the shareholder (Q&A No. 4). If the S corporation has more than one shareholder, each shareholder must file his or her own consent agreement for certain triggering events in order to be permitted to pay the Sec. 965(i) tax in installments under Sec. 965(h). In addition to the consent agreement, the taxpayer is still required to make a timely Sec. 965(h) election (see Q&A No. 6). This signed election statement must be attached to the taxpayer's tax returns; and the appropriate Form 965-A or Form 965-B, which tracks the Sec. 965 tax liability, must be updated for the triggering event, election, and installment payments.
In Q&A No. 7, the IRS reminds taxpayers that if a Sec. 965(h) election is made, excess remittances in the year of a Sec. 965(i) triggering event cannot be refunded or credited to the next year's estimated income tax until the tax year's income tax liability is paid in full, including the Sec. 965(h) installments. The rationale behind this is that the previously deferred Sec. 965(i) net tax liability is immediately assessed as an addition of tax in the year of the triggering event. The Sec. 965(h) election only defers the payment, not the actual tax liability.
As such, with a Sec. 965(h) election in the year of a triggering event, the tax payments must be applied initially to the tax liability without Sec. 965, and the first Sec. 965(h) installment then to any succeeding Sec. 965(h) installments. Once the tax year's liability is fully satisfied, the taxpayer may receive a refund or credit to the next year's income tax if any excess remittances remain. Therefore, if the taxpayer plans to make a Sec. 965(h) election, the taxpayer must be careful of how much estimated tax payments are actually made for the tax year of a triggering event in order to get the most benefit out of the election.
Lastly, the IRS explains that the S corporation and transferor, if applicable, remain jointly and severally liable for a taxpayer's Sec. 965(i) net tax liability, even if a Sec. 965(h) election was made (Q&A No. 8). They will continue to be accountable for payments of the net tax liability, penalties, additions to tax, or other related amounts. The election does not alter the joint and several liabilities of the S corporation or transferor as discussed in Sec. 965(i)(5) and related Treasury regulations.
Mark G. Cook , CPA, CGMA, MBA, is the lead tax partner with SingerLewak LLP in Irvine, Calif.
For additional information about these items, contact Mr. Cook at 949-261-8600 or [email protected] .
All contributors are members of SingerLewak LLP.
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Business Income Manual
Bim33480 - stock: valuation on discontinuance of business: stock transferred to a uk trader.
SS164-169 Corporation Tax Act 2009 and SS175-180 Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005)
Where stock from a discontinued trade is transferred to another trader who will deduct the cost of that stock in computing their trading profits, there are specific rules determining the value of the stock. There are different rules as follows:
- where the two parties are not connected,
- where the two parties are connected, or
- where the two parties are connected but an election for substituted value has been made.
The connected person rules are in S168 CTA 2009 and S179 ITTOIA 2005. Trading stock is defined in S163 CTA 2009 and S174 ITTOIA 2005. See BIM33495 for details of both these terms.
If the parties are not connected then the value of the stock is the value of the consideration, in cash or otherwise, given for the stock (S165 CTA 2009 and S176 ITTOIA 2005). The value to be taken for closing stock is the net amount realised on the transfer of the stock (see BIM33485 ). This means that a deduction is allowed for any expenses wholly and exclusively incurred for the purposes of the sale or transfer of the stock.
The same value must be used by both parties to the transaction (S169 CTA 2009 and S180 ITTOIA 2005) (see BIM33515 ). HMRC officers should liaise with their colleagues dealing with the other party to the transaction to ensure that a consistent view is taken. For a description of the mechanism for resolving any disagreements, see BIM33550 .
Where the stock is transferred with other assets and liabilities, the value of the stock is the just and reasonable apportioned amount of the consideration given (see BIM33485 ). This will usually be the fair value used by the purchaser in their opening balance sheet which may well be the same as the value used by the parties in the sale agreement (S165(3) CTA 2009 and S176(3) ITTOIA 2005).
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Where the parties are connected and the stock is not subject to separate rules (see BIM33510 ) then S166 CTA 2009 or S177 ITTOIA 2005 apply in that if the stock is sold or transferred at:
- an arm’s length price (see BIM33495 ) then that price is used,
- more than the arm’s length price then the arm’s length price is substituted,
- less than an arm’s length price then the arm’s length price is substituted; but if that arm’s length price is greater than both the acquisition value (see BIM33495 ) and the price received (see BIM33495 ) then the parties may make a joint election under S167 CTA 2009 or S178 ITTOIA 2005 to substitute whichever is the greater of the price received or the acquisition value (see below).
Both parties to a transaction have to use the same value for the particular stock (S169 CTA 2009 and S180 ITTOIA 2005) (see BIM33515 ). HMRC officers should liaise with their colleagues dealing with the other party to the transaction to ensure that a consistent view is taken. For a description of the mechanism for resolving any disagreements, see BIM33550 .
Connected traders with election
As mentioned above, where certain conditions are satisfied, connected parties involved can make a joint election for the value of the stock transferred to be taken for tax purposes as the greater of the acquisition price or the price actually received for it (S167 CTA 2009 and S178 ITTOIA 2005).
The conditions to be satisfied in order to make this election are that:
- the arm’s length value is more than the acquisition value of the stock and the price actually paid for it,
- both parties to the sale or transfer have to elect for the relevant provisions to apply, and
- they make the election within two years after the end of the chargeable period in which the trade is discontinued; the time limit is calculated by reference to the vendor’s chargeable period, an accounting period for a company or a tax year of assessment for an individual.
If this facility to elect was not available, substantial unrealised profits could be taxed before a cash profit is realised when transactions were undertaken for purely commercial reasons. For example, a builder’s land bank may be retained in a group for 15-20 years. Without the election, a group reorganisation with stock passing between traders at its commercial book value five years after acquiring the land would trigger a tax charge on the increase in its worth over its original cost even though there may not be any prospect of a commercial realisation for another ten years. To overcome this difficulty the parties can elect to ensure that unrealised gains are not taxed on the vendor.
The requirement for the election to be for the greater of the price received or the acquisition value (but not more than the arm’s length value) ensures that any commercially realised profits on sale are recognised for tax purposes.
The stock is treated as being sold to the other party immediately before discontinuance and that sale as being in the ordinary course of trade. This forestalls any argument that the sale would be a capital transaction (for which a deduction would not be allowed for the cost of the stock and for which the acquisition value would be nil).
- No election possible because arm’s length value is not greater than the acquisition value
The acquisition value of the vendor’s stock is the cost of £3m. The arm’s length value of the stock when sold is £2m. But in fact the sale is for £1m.
In this situation the parties cannot elect that the arm’s length value of £2m should not be used as the value on disposal. This is because the arm’s length value of £2m is not greater than both the price of £1m and the acquisition value of £3m.
- No election possible because arm’s length value is not greater than agreed price
The acquisition value of the vendor’s stock is the cost of £1m. The arm’s length value of the stock when sold is £2m. But in fact the sale is for £10m.
In this situation the parties cannot elect that the arm’s length value of £2m should not be used as the value on disposal. This is because the arm’s length value of £2m is not greater than both the price of £10m and the acquisition value of £1m.
- Election possible as arm’s length value greater than actual price and acquisition value: actual price used as greater
The acquisition value of the vendor’s stock is the cost of £2m. The arm’s length value of the stock when sold is £10m. But in fact the sale is for £8m.
In this situation the parties may elect that the arm’s length value of £10m should not be used and instead that value on disposal should be at actual price of £8m - as this is greater than the £2m acquisition value.
- Election possible as arm’s length value greater than actual price and acquisition value: acquisition value used as greater
The acquisition value of the vendor’s stock is the cost of £10m. The arm’s length value of the stock when sold is £12m. But in fact the sale is for £9m.
In this situation the parties may elect that the arm’s length value of £12m should not be used and instead that value on disposal should be at acquisition value of £10m - as this is greater than the price received of £9m.
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Making Training Stick: A Guide to Ensuring Transfer of Training
August 19, 2021 in Keeping Up with Human Capital , Learning & Development By Catherine Neale
Benefits to training
Training provides employees with unique knowledge, skills, and abilities (KSAs) that add value to the organization and allow for high performance on the tasks that are necessary to achieve organizational success. 1 Training benefits both employees and organizations through three different mechanisms. First, when employees engage in training, their new KSAs can increase organizational performance (e.g., profitability, effectiveness, productivity). Second, when organizations choose to invest in their employees, employees tend to reciprocate that investment through increased effort and commitment. Finally, through the symbolic value of training. When organizations invest in training, they’re showing what is important to the organization. That investment shows that organizations value employees’ contributions and development, which in turn, can increase employees’ willingness to work hard to achieve the organization’s goals. 2 While simply investing in training can increase things like employee satisfaction and commitment, job performance only increases when the benefits of training are maximized through ensuring the transfer of training .
Transfer of training
What is transfer of training? Transfer of training refers to the degree to which trainees can effectively apply the KSAs gained from the training to the job context. 3 The transfer of training involves the generalization and maintenance of the KSAs acquired from the training. 4
- Generalization deals with applying the knowledge learned during training to the job context and determining which behaviors are expected to change after training is complete, as well as how often new skills are required to be used.
- Maintenance deals with remembering the KSAs learned over time, how long they are expected to be maintained, and what factors can be used to enhance KSA development.
Once the standards for generalization and maintenance of KSAs gained from training are decided upon, we can engage in strategizes to ensure that those standards are met after the training is complete. If employees complete training and can’t apply it to the job (generalization), organizations are losing out on benefits like increased job performance and employees will likely lose the KSAs over time if they aren’t actively using them (maintenance). Luckily there are things the employee and organization/supervisors can do to ensure that both generalization and maintenance occur, and that training will transfer! This blog will give helpful tips based on the factors that impact training transfer at the employee, organization/supervisor, and training level.
Employees play a powerful role in whether or not training will transfer, and are thought to account for a majority of the variability in training outcomes. The most common employee characteristics that impact training transfer are attitudes, motivation, and perceived utility. 5
- Attitudes: In order for training to be successful, and to maximize transfer, employees must have positive attitudes towards the training. Employees must be prepared to learn and must also have the necessary prerequisite/abilities to learn the new behaviors. If the employee doesn’t feel ready or able to master the training content, then their learning and transfer will be negatively impacted.
- Motivation: Transfer is facilitated when employees are motivated to learn and transfer knowledge throughout the whole training process. Employees need to believe in their ability to learn, transfer the knowledge, and increase their job performance in order to be motivated to commit to the process and get the most out of training.
- Perceived utility: Employees who understand the use and value of the training are far more likely to be engaged during the training and work to apply their new KSAs on the job later. If employees don’t see how they are going to use the training, they won’t put the work in to apply or maintain the information gained.
There are several things that organizations and supervisors can do to facilitate the transfer of training for their employees. 5
- In order to help employees develop positive attitudes about training, increase motivation, and understand the utility of the training, it is crucial for organizations and supervisors to give a realistic preview of the course, as well as outline the benefits and outcomes of the training to ensure buy in and increase engagement and readiness to learn.
- For training to transfer, it is important that supervisors are supportive of the training opportunity as well as encourage use of the newly acquired skills on the job after the training is complete. Supervisors can also guide employees on when and where it is appropriate to apply training as a way to encourage and support employees post training.
- Supervisors can encourage employees who undergo training to set up goals for applying the new KSAs to the workplace. Goals have been shown to increase the likelihood of training transfer by directing attention, stimulating action, and encouraging employees. 6
- To support training transfer, organizations can provide additional learning opportunities to encourage maintenance of the KSAs learned, as well as feedback on the application of KSAs to the job.
- Organizations and supervisors can provide recognition and rewards to employees who increase performance based on the generalization and maintenance of the KSAs gained from the training. This attention and recognition of achievement has been shown to have long term impacts on the level of transfer of training knowledge. 7
- Lastly, it is important for organizations to have a climate that encourages the application of new KSAs and makes sure that employees aren’t afraid to make mistakes when engaging in new behavior. This will make employees feel more comfortable and encourage others to engage in training and training application.
There are several training design and implementation elements that will enhance transfer of training. 3
- If the work setting is similar to the training setting, there is a higher probability the employee will see the opportunities to apply their new knowledge on the job.
- The content being taught should be contextualized across multiple different situations to encourage generalization.
- There should be a variety of different examples provided in the training, as well as different types of practice conditions to encourage knowledge retention and application.
- During training it is helpful to identify common errors and issues that arise with applying the knowledge so that employees are expecting them when they are applying the new KSAs after the training.
Training initiatives have many benefits for both organizations and employees. However, when there are no opportunities for generalization and maintenance, the KSAs gained in training opportunities don’t always get reflected in employees’ job performance. It is critical that employees and organizations work together to make the most of trainings and capitalize on the benefits by utilizing strategies to ensure that training transfers.
Catherine Neale is a Human Capital Consultant on FMP’s Strategic Human Capital Management team and is an Industrial Organizational Psychologist. Catherine is from upstate New York and enjoys running, rock climbing, and baking.
- Ostroff, C., & Bowen, D. E. (2000). Moving HR to a higher level: HR practices and organizational effectiveness. Moving HR to a higher level: HR practices and organizational effectiveness. – PsycNET (apa.org)
- Tziner, A., Fisher, M., Senior, T., & Weisberg, J. (2007). Effects of trainee characteristics on training effectiveness. International Journal of Selection and Assessment , 15(2), 167-174. Tziner__Fisher__Senior____Weisberg_2007_IJSA-with-cover-page-v2.pdf (d1wqtxts1xzle7.cloudfront.net)
- Baldwin, T. T., & Ford, J. K. (1988). Transfer of training: A review and directions for future research. Personnel psychology , 41(1), 63-105. TRANSFER OF TRAINING: A REVIEW AND DIRECTIONS FOR FUTURE RESEARCH – BALDWIN – 1988 – Personnel Psychology – Wiley Online Library
- Goldstein, I. L. and Ford, J. K. (2002), Training in Organizations, 4th edn (Belmont, CA: Wadsworth Thompson Learning).
- Grossman, R., & Salas, E. (2011). The transfer of training: what really matters. International journal of training and development, 15(2), 103-120. The transfer of training: what really matters (ftq.qc.ca)
- Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American psychologist , 57(9), 705. ContentServer.asp (farmerhealth.org.au)
- Cromwell, S. E., & Kolb, J. A. (2004). An examination of work‐environment support factors affecting transfer of supervisory skills training to the workplace. Human resource development quarterly , 15 (4), 449-471. An examination of work‐environment support factors affecting transfer of supervisory skills training to the workplace – Cromwell – 2004 – Human Resource Development Quarterly – Wiley Online Library
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Transfer of Training: 4 Secrets to Making Employee Learning Stick
Most learning and development initiatives are meant to save money or make money. So when corporate learning and development initiatives don’t improve organizational measures, you lose twice.
First, you lose the cost of the training itself in time and dollars. But you also never realize the benefits of the training being applied. The point: transfer of training is critically important for learning and development teams.
Yet, despite the importance, many companies lean heavily on learning methods focused on knowledge acquisition. The problem is that only about 19 percent of knowledge acquired can be skillfully applied . And without application, we forget 75 percent of what we learned in less than a week.
So what’s the solution? Building transfer of training principles into your L&D activities makes them “stickier” and increases training effectiveness. Below we discuss how to implement transfer of training principles into your program for maximum effect.
How to Build Transfer of Training into Your L&D Efforts
Transfer of training can be a tricky concept to understand—and even tougher to master and implement in your L&D efforts. However, if you want your training efforts to succeed in today’s business world , it’s a concept you shouldn’t ignore.
We cannot discuss transfer of training without discussing knowledge application. The two concepts go hand-in-hand.
Knowledge application refers to applying information or skills gained during a training session to a real-world situation. We like to conceptualize knowledge application as the glue that ties training efforts to employee development and improved job performance. Even the most engaging training will be ineffective if the employee can’t see how the lessons apply to their daily job duties.
Related Read : The Top 5 Trends in Learning and Development
When conducting L&D activities, you will want to ensure that you are including knowledge application in those efforts. Knowledge without application is just information . With the amount of information presented to us daily, it’s estimated that we only retain between 10-20 percent of what we hear or read.
In other words, if your employees aren’t able to see how the information provided in your L&D efforts applies to their daily work, they will be less likely to retain the information—and less likely to engage with the training activities in the first place.
The result? Wasted company time and resources on training and development that will not change behavior or produce results.
Start with Understanding the Three Types of Training Transfer
The first secret to mastering transfer of training is developing an understanding of the three types of knowledge transfer: positive transfer, negative transfer, and zero transfer. Examining these three types of training transfer will help you assess your current efforts. Let’s examine each type in a bit more detail.
Positive transfer occurs when one skill helps you learn another new skill. This type of training transfer often occurs when two skills are closely related or require the same underlying understanding.
For example, an employee who already knows SQL may find it easier to learn HTML. The two coding languages are not directly related, but understanding the structure of one may help a learner grasp the structure of the other.
Negative transfer occurs when learning one skill makes it more difficult to learn another new skill. Similarly to positive transfer, the two skills in this scenario will likely be closely related or based on the same root knowledge. However, the skills will require wildly different applications or processes.
An example of negative transfer is when a student taught to use MLA citations in their schoolwork begins a new program and must now cite using APA style. The citation styles share many similarities, but the student’s understanding of MLA is likely to trip them up in the areas where the styles differ. In other words, knowing MLA style has made APA style more difficult to master.
The final type, zero transfer, occurs when one skill does not affect your ability to learn another new skill. Generally speaking, this occurs when two skills are completely unrelated.
For example, an employee’s knowledge of Microsoft Excel is not likely to impact their ability to learn the soft skill of leadership. Understanding how to structure a spreadsheet and how to inspire and guide subordinates are unrelated to one another, so the employee’s knowledge of one will not impact their ability to learn the other.
Then, Look at the Transfer of Training Model
Once you understand the three types of training transfer and how they apply to your organization, you are ready to examine the transfer of training model. Multiple models exist, but the Baldwin and Ford model is the simplest and most effective. The Baldwin and Ford model is comprised of a three-stage process:
Stage One: Training Inputs
Training inputs refer to the elements present going into a training session. These fall into three categories:
- Trainee Characteristics: How motivated is this individual to engage with this training? The trainee’s capabilities also come into play here. Is this training too advanced for the trainee, or will they be able to succeed?
- Training Design: How well has the content of this training been prepared and sequenced? Here, we consider the quality and appropriateness of the training.
- Work Environment: Will the employee use the knowledge and skills gained in this training on the job? Additionally, you should consider support issues here—will your trainee have access to resources to help them with this new knowledge post-training?
Stage Two: Training Outputs
Training outputs are the results gained from completing the training. In this stage, you will want to consider your trainees’ success in the training program. How much have they learned throughout the training session or sequence? You will also want to consider retention here. If the trainee does well during the session but forgets all the lessons learned within a week, the training output is unsuccessful.
Stage Three: Conditions of Transfer
Even if retention is strong in stage two, transfer of training is not guaranteed. For transfer of training to occur, the conditions of strong training transfer need to be met.
According to the Baldwin and Ford model, these conditions are met when the concepts passed on through training are maintained in the work environment. A few factors that impact the trainee’s ability to retain their knowledge successfully include having a system of support in the office, opportunities to perform work relevant to the material learned, and regular feedback and check-ins with leadership to ensure that transfer of training has occurred.
Source: Baldwin and Ford (1988)
Based on this model, which employee is more likely to retain training material successfully?
- Employee A: The employee in this scenario is unmotivated to complete training, believing it to be a waste of time. The training material is strong, but delivered sporadically. After the session, leadership never mentions the training again, and the employee is never actively encouraged—or shown how—to use the training material on the job.
- Employee B : The employee in this scenario has been told by management how valuable the upcoming training is for the team. They are excited to learn the skills outlined and already understand how this information will help them in their job. The training material is just as strong as the first scenario and delivered in a regular, thought-out sequence. After each training, leadership takes steps to check in with the employee to ensure they understand the material and see how they are using it in their job.
Even though both employees receive strong training materials, Employee B is far more likely to retain the knowledge from their training than Employee A based on the other factors present in the situation.
Next, Identify the Learning Inputs You can Positively Influence
From examining the Baldwin and Ford Transfer of Training Model, it is easy to see that the training inputs significantly impact the transfer of training. Therefore, the next secret to making employee learning stick is to identify learning inputs within your control.
The more factors you can positively impact, the greater your chances of positive training transfer.
Training Strategies & Activities
Training strategies and activities are where you have the most direct impact on transfer of training. Here are some of the training factors you can influence:
- Similarity: The training activity or strategy will be more effective if it is similar to the trainee’s work environment. A simulation that mimics a real-world setting will be more effective than a PowerPoint lecture.
- Active learning: The degree to which the employee is engaged in the training session. Hands-on learning, like learning modules in CapsimInbox’s simulations or VR simulation training , will be more effective than reading a hand-out.
- Behavioral modeling: When the employee is shown the correct way to manage a situation in a real-world setting, it is easier to model that behavior later.
- Error-based examples: Does your training focus on how to learn from errors? Mistakes happen on the job. Examples and simulations rooted in critical problem-solving result in greater transfer.
- Collaboration: How much opportunity is the training given to work with trainers, supervisors, and other trainees? The best learning occurs collaboratively, not in a vacuum.
- Multiple strategies: Are you leaning on the same training method for all your sessions? Using a variety of training strategies can aid in learning. CapsimInbox’s microlearning options divide training into bite-sized experiences that are easy to mix and match for variety.
- Goals: Employees benefit from the establishment of clear expectations. The more transparent your goals for the training session, the more likely the trainee is to meet them.
- Assessments: Check-ins regarding the trainee’s knowledge. Simulation training through CapsimInbox allows for periodic assessments throughout the training process, giving the trainee—and the trainer—an idea of how much the trainee has learned.
- Transfer climate: Does your work environment contain reminders of the training material? These reminders can be visual cues or verbal ones from management. The more cues in the work environment, the higher transfer levels occur.
- Support: The degree to which others in the workplace are willing to support your trainee in their knowledge transfer. When a trainee feels supported by management and peers, they are more likely to retain what they have learned.
- Opportunity to perform: How often will your trainee get the opportunity to use what they have learned? When their work environment mimics the training environment, the trainee is more likely to retain their knowledge. Using a custom simulation designed to mimic your current work environment from CapsimInbox sets you up for success in training transfer.
- Check-ins: Refresh your trainees’ memories with regular check-ins. CapsimInbox allows for post-assessments and periodic training modules that will assist with training transfer in this area.
Finally, Build these Inputs into Your L&D Program
As you delve into the details of the steps provided above, you may discover that your current L&D efforts include some of these practices. If so, this is an excellent start: keep up those practices.
It can be difficult to control learner outcomes, so it’s vital to understand and identify the factors you can control. Determining areas where you can have the most influence is a vital step toward effectively allocating your team’s resources, time, and effort.
As always, you will also want to ensure you are tying these efforts and changes to your L&D program back to your KPIs and other business metrics. Ensure your efforts align with your current departmental goals and objectives.
Related Read: How to Measure ROI for your Leadership Development Programs
Keeping your eyes on your metrics will also enable you to measure your L&D program’s progress over time. This practice will help you see whether your efforts positively impact employees, enabling you to course-correct if you do not see the desired results.
What Tools Can Help with Transfer of Training?
The success of your L&D program depends on knowledge retention. If your learning is not “sticky,” your organization will not see a positive return on its investment into its L&D efforts. Transfer of training makes the difference between an L&D success story and a resounding disappointment.
One of the keys to transfer of training is applying knowledge learned in job-like situations. At Capsim, we have seen firsthand how simulations can help your trainees do just that. CapsimInbox offers a variety of off-the-shelf simulations as well as custom-build simulations.
No matter your trainee’s role or training topic, a simulation enables your employees to apply knowledge in a controlled, real-world setting. Additionally, CapsimInbox can assess and measure your trainees’ skill improvements over time.
Curious to see how CapsimInbox can help your training stick? Test out an inbox simulation in just minutes. 👇
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Stock Assignment Separate from Certificate Transferring Stock to Revocable Trust | Practical Law
Stock Assignment Separate from Certificate Transferring Stock to Revocable Trust
Practical law standard document w-036-2266 (approx. 9 pages).
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Tax-Free Transfers Incident to a Divorce – What Qualifies?
Dividing assets in a divorce is rarely a simple matter. It gets even more complicated when there is a transfer of property between spouses after a divorce.I
When transferring assets as part of a negotiated settlement or divorce proceeding, it might not be possible to complete the transfer immediately due to financial or logistical reasons.
Timing is everything , as the saying goes.
It’s important to understand the rules regarding the transfer of property between spouses after a divorce, and how the timing impacts how – and whether – transactions are taxed.
Does the Transaction Qualify As a Section 1041 Transfer?
A good starting point is to determine whether the transaction qualifies as an IRC Section 1041 transfer.
Internal Revenue Code Section 1041 lays out the rules for property that is transferred between spouses who are divorcing or are divorced. It provides that a property transfer is incident to the divorce if it occurs within one year of the divorce, or if it is related to the cessation of the marriage.
If the transaction qualifies as a Section 1041 transfer, it is not subject to taxation and the basis of the asset carries over to the receiving spouse.
Special Rules Relating to Timing of Transfer
There are special rules relating to the timing of the transfer. To achieve the most advantageous financial outcome for a divorcing client, family law attorneys should consider how these special rules apply to their clients.
The One-Year and Six-Year Tests
Let’s look at some key property transfer benchmarks on the divorce timeline:
Source: Thomson Reuters Checkpoint, 601 Applicability of IRC Sec. 1041
Transfers Taking Place Within One Year of the Divorce
No support or evidence is required when a transaction takes place within one year of the divorce. The presumption is that property transferred between former spouses is merely a shifting around of jointly owned assets and therefore, is not subject to taxation. This rule applies even if the transferred property was acquired after the divorce was final.
Consider this example:
John and Beth were divorced in July 2017. In January 2018, John purchased stock for $50,000. John then transferred the stock to Beth in June 2018, which increased in value to $60,000, to satisfy an obligation to her as part of the divorce settlement. No gain or loss would be recognized by John or Beth for this transaction.
Transfers Taking Place Between the One-Year and Six-Year Anniversary of the Divorce
A transfer of property that occurs between the one-year and six-year anniversary must be made pursuant to a divorce or separation instrument to be presumed related to the cessation of the marriage and qualify for Section 1041 treatment. A divorce or separation instrument includes a decree of divorce or separate maintenance, a written separation agreement, or other court decree.
It is also worth noting that a divorce instrument includes amendments or modifications to the instrument. A divorce instrument that does not provide for a transfer of property can be later modified to include one and will therefore ensure that no gain or loss will be recognized.
Private Letter Ruling 9306015 provides an example of a transfer of property found to be related to the cessation of the marriage:
Mr. and Ms. Young divorced in 1988. In 1989, they entered into a settlement agreement, which provided that Mr. Young deliver to Ms. Young a promissory note for $1.5 million, which was secured by 71 acres of land. In 1990, Mr. Young defaulted on this obligation and entered into a later settlement agreement to transfer 59 acres of land (42.3 acres of the original 71 acres and 16.7 acres of land adjoining that tract). In accordance with the later settlement agreement, Mr. Young retained an option to repurchase the land for $2.2 million on or before December 1992. Mr. Young assigned the option to a third party, who exercised the option and bought the land from Ms. Young for $2.2 million. No gain or loss was recognized on the transfer of the property from Mr. Young to his former spouse. Ms. Young took the marital basis of the land and recognized a gain on the subsequent sale to a third party.
Transfers Taking Place After the Six-Year Anniversary of the Divorce
In general, property transferred more than six years after the divorce is final does not qualify for Section 1041 treatment.
Any transfer that is not pursuant to a divorce or separation instrument and occurs more than six years after the divorce becomes final is presumed to be unrelated to the cessation of the marriage. While the IRS guidance is unclear, there are special circumstances in which property transfers after the six-year mark would qualify as a tax-free transfer.
The presumption that a transfer was not related to the cessation of the marriage “may be rebutted only by showing that the transfer was made to effect the division of property owned by the former spouses at the time of the cessation of the marriage. For example, the presumption may be rebutted by showing that (a) the transfer was not made within the one- and six-year periods described above because of factors which hampered an earlier transfer of the property, such as legal or business impediments to transfer or disputes concerning the value of the property owned at the time of the cessation of the marriage, and (b) the transfer is effected promptly after the impediment to transfer is removed.” (Source: Section 1.1041-1T(b), Q&A-7 of the Temporary Income Tax Regulations)
There is a documented case where the presumption that the transfer was not related to the cessation of the marriage was clearly rebutted.
In Private Letter Ruling 9235026 (May 29, 1992), the IRS ruled that the transfer of the wife’s interest in business property to her ex-husband was incident to the divorce even though the transfer occurred more than six years after the divorce. It was determined that the transfer was delayed because of a dispute over the purchase price and payments terms. After the disputed factors were resolved, the transfer was promptly completed. Temp. Treas. Reg. §1.1041-1T, A-7 specifically provides that the presumption may be rebutted only by showing that the transfer was made to effect the division of property owned by the former spouses at the time of the cessation of the marriage, and there were factors that hampered an earlier transfer of property.
To qualify for Section 1041 treatment, a transfer of property should take place before the six-year anniversary of a divorce and be supported by a divorce or separation agreement after the one-year anniversary of the divorce. In circumstances where the property transfer cannot be completed within a six-year time frame, the best support is a written divorce or separation agreement documenting the contemplated transfer, and support for why the transfer could not be completed during the six-year time frame. There are documented exceptions to the six-year rule, but the guidance is not clear and would surely be evaluated by the IRS based on the specific facts and circumstances surrounding the property transfer.
Our litigation support professionals help family law attorneys form solid financial strategies for their divorcing clients. Contact us online or call 800.899.4623 for help.
Published on February 13, 2019
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2020 Georgia Code Title 14 - Corporations, Partnerships, and Associations Chapter 4 - Secretary of State Corporations Article 8 - Merger and Share Exchange § 14-4-146. Cessation of Stockholders' Rights and Transfer of Stock to Corporation
Upon making demand in writing for the value of his stock under Code Section 14-4-143, a stockholder shall forfeit all rights with respect to such stock except the right to receive payment therefor. Upon payment of the agreed value of the stock or of the value of the stock on final judgment, the stockholder shall transfer his stock to the surviving or resulting corporation.
(Code 1933, § 22-4407, enacted by Ga. L. 1968, p. 565, § 1.)
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Short-Term Training Cessation as a Method of Tapering to Improve Maximal Strength
- 1 Department of Exercise and Sport Science, Faculty of Health Science, Universal College of Learning, Palmerston North, New Zealand.
- 2 Sports Performance Research Institute New Zealand, Auckland University of Technology, Auckland, New Zealand.
- 3 School of Sport and Exercise, Massey University, Palmerston North, New Zealand.
- 4 Faculty of Health Science, Universal College of Learning, Palmerston North, New Zealand.
- 5 Faculty of Health Sciences and Medicine, Bond University, Queensland, Australia.
- 6 Cluster for Health Improvement, Faculty of Science, Health, Education and Engineering, University of the Sunshine Coast, Queensland, Australia.
- 7 School of Medical and Health Sciences, Edith Cowan University, Perth, Australia.
- PMID: 29369954
- DOI: 10.1519/JSC.0000000000001803
Pritchard, HJ, Barnes, MJ, Stewart, RJC, Keogh, JWL, and McGuigan, MR. Short-term training cessation as a method of tapering to improve maximal strength. J Strength Cond Res 32(2): 458-465, 2018-The aim of this study was to determine the effects of 2 different durations of training cessation on upper- and lower-body maximal strength performance and to investigate the mechanisms underlying performance changes following short-term training cessation. Eight resistance trained males (23.8 ± 5.4 years, 79.6 ± 10.2 kg, 1.80 ± 0.06 m, relative deadlift 1 repetition maximum of 1.90 ± 0.30 times bodyweight [BW]) each completed two 4-week strength training periods followed by either 3.5 days (3.68 ± 0.12 days) or 5.5 days (5.71 ± 0.13 days) of training cessation. Testing occurred pretraining (T1), on the final day of training (T2), and after each respective period of training cessation (T3). Participants were tested for salivary testosterone and cortisol, plasma creatine kinase, psychological profiles, and performance tests (countermovement jump [CMJ], isometric midthigh pull, and isometric bench press [IBP]) on a force plate. Participants' BW increased significantly over time (p = 0.022). The CMJ height and IBP peak force showed significant increases over time (p = 0.013, 0.048, and 0.004, respectively). Post hoc testing showed a significant increase between T1 and T3 for both CMJ height and IBP peak force (p = 0.022 and 0.008 with effect sizes of 0.30 and 0.21, respectively). No other significant differences were seen for any other measures. These results suggest that a short period of strength training cessation can have positive effects on maximal strength expression, perhaps because of decreases in neuromuscular fatigue.
- Athletic Performance / physiology
- Creatine Kinase / blood
- Cross-Over Studies
- Muscle Strength / physiology*
- Muscle, Skeletal / physiology*
- Resistance Training / methods*
- Young Adult
- Creatine Kinase
for this Training Class ... •The sale or transfer of stock in a corporation ... •Cessation of operations resulting in at least a 90% reduction in the total value of product output •A temporary cessation >2 years •Chapter 7 bankruptcy or Chapter 11 bankruptcy if it results in a liquidation
At the time of the triggering event, the entire amount of the deferred tax liability will be due unless (1) in the case of a stock transfer described in Sec. 965 (i) (2) (A) (iii), a transfer agreement is entered into by an eligible transferor and an eligible transferee for stock transfers (Sec. 965 (i) (2) (C)); or (2) the S corporation shareho...
The training program is based on four principles: (1) evidence-based content on tobacco use and cessation, (2) the application of behavioral theory (transtheoretical model) to provide tobacco cessation interventions tailored to a patient's readiness to change, (3) appropriate pharmacologic therapy options and their use in tobacco cessation, and ...
Until the introduction of transfer pricing rules applicable to wholly domestic transactions, the tax rules applying to the treatment of trading stock on the cessation of a trade were dealt...
Transfer of stock Transfer of stock Didn't find your answer? Search AccountingWEB Advertisement Latest Any Answers Our client wishes to transfer trading stock from his limited company to another limited company (controlled by the same director but not a group). Stock has been valued at lower of cost and net realisable value.
Where stock from a discontinued trade is transferred to another trader who will deduct the cost of that stock in computing their trading profits, there are specific rules determining the value...
Maximize Training Transfer Ensure newly learned skills can be used on the job by systematically synchronizing work process redesign with training outcomes. Ensure newly learned skills can be...
Transfer of training refers to the degree to which trainees can effectively apply the KSAs gained from the training to the job context. 3 The transfer of training involves the generalization and maintenance of the KSAs acquired from the training. 4
To the best of our knowledge, this paper is the first work to explore the potential of data selection which is jointly trained with transfer learning in the field of stock movement prediction. 2.4. Problem statement. Stock movement prediction task is to learn a prediction function Y = f ( X, θ), where θ is the parameter and Y ∈ ( − 1, 1 ...
The first secret to mastering transfer of training is developing an understanding of the three types of knowledge transfer: positive transfer, negative transfer, and zero transfer. Examining these three types of training transfer will help you assess your current efforts. Let's examine each type in a bit more detail. Positive Transfer
DTC provides (i) settlement services for virtually all equity, corporate and municipal debt trades and Money Market Instruments in the U.S. Approximately 1.4 million settlement-related transactions per day, with a value of approximately $600 billion, are completed at DTCC in an efficient and risk-controlled process and (ii)central safekeeping an...
2 Valuation of trading stock on cessation (1) In section 162 of CTA 2009 (valuation of trading stock on cessation), after subsection (2) (transfer pricing rules to take precedence) insert— "(2A) Subsection (2B) applies if— (a) by virtue of subsection (2), no valuation of the stock under this Chapter is required, and
Ruling for training purposes only. Systemic or multiple reproduction, distribution to multiple ... 8. Valuation of Stock in Trade on Cessation of Business 13 9. Stock in Trade Obsolescence 17 10. Diminution in Value of Shares as Stock in Trade 17 ... 5.2 Transfer of ownership of property in goods from a seller to a purchaser
by Practical Law Trusts & Estates. A Standard Document used for the transfer of stock in a closely held corporation (sometimes called a close corporation) to a revocable trust, called a stock assignment separate from certificate, that can be customized for use in any US jurisdiction. This Standard Document contains integrated notes and drafting ...
In January 2018, John purchased stock for $50,000. John then transferred the stock to Beth in June 2018, which increased in value to $60,000, to satisfy an obligation to her as part of the divorce settlement. No gain or loss would be recognized by John or Beth for this transaction.
Cessation of Stockholders' Rights and Transfer of Stock to Corporation. Universal Citation: GA Code § 14-4-146 (2020) Upon making demand in writing for the value of his stock under Code Section 14-4-143, a stockholder shall forfeit all rights with respect to such stock except the right to receive payment therefor. Upon payment of the agreed ...
NOTE: If after the O/B transfer of CFC2 stock to CFC1, CFC2 checked the box (CTB) to be a DE of CFC1 and is no longer a FC for U.S. tax purposes, see related Practice Unit, "Outbound Transfer of Foreign Stock followed by CTB Election," DCN: ISO/9411.08_05(2014) for guidance. Tax Organizational Charts - Beginning of Year and Ending of Year
When a sole trader transfers his/her trade to a company, the sole trade will cease and the income tax cessation provisions (section 67 Tax Consolidation Act 1997) will apply. These cessation provisions require a penultimate year review to take place.
Pritchard, HJ, Barnes, MJ, Stewart, RJC, Keogh, JWL, and McGuigan, MR. Short-term training cessation as a method of tapering to improve maximal strength. J Strength Cond Res 32(2): 458-465, 2018-The aim of this study was to determine the effects of 2 different durations of training cessation on uppe …