Sec. 138127. Modifications to determination of deemed paid credit for taxes properly attributable to tested income
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/bill/117/hr/5376/rh/section-138127·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 960(d)(1) is amended by striking 80 percent and inserting 95 percent (100 percent in the case of tested foreign income taxes paid or accrued to a possession of the United States) . Section 960(d)(3) is amended to read as follows: For purposes of paragraph (1), the term tested foreign income taxes means, with respect to any domestic corporation which is a United States shareholder of a controlled foreign corporation, such shareholder’s pro rata share (as determined under section 951A(e)(1)) of— the foreign income taxes (within the meaning of section 904(d)(2)(F)) which are properly attributable to amounts taken into account in determining tested income or tested loss under section 951A(b)(2), and solely to the extent provided in regulations prescribed by the Secretary, the foreign income taxes (as so defined) paid or accrued by a foreign corporation (other than such controlled foreign corporation) which owns, directly or indirectly, 80 percent or more (by vote or value) of the stock in such domestic corporation but only if— such foreign income taxes are properly attributable to amounts of such controlled foreign corporation taken into account in determining tested income or tested loss under section 951A(b)(2), and no credit is allowed, in whole or in part, for such foreign taxes in any foreign jurisdiction. .
Section 904(d)(2) is amended by redesignating subparagraph
(K)as subparagraph
(L)and by inserting after subparagraph
(J)the following new subparagraph: Any amount includible in gross income under section 78 shall be treated as income in the same separate category as the related foreign taxes deemed paid. . Section 904(d)(3)(G) is amended by striking the second sentence and inserting the following: Any amount included in gross income under section 78 shall not be treated as a dividend. . Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2021, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. The amendments made by subsection
(c)shall apply to taxable years beginning after December 31, 2017.