Sec. 70311. Modifications related to foreign tax credit limitation
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Section 904(b) is amended by adding at the end the following new paragraph: Solely for purposes of the application of subsection
(a)with respect to amounts described in subsection (d)(1)(A), the taxpayer’s taxable income from sources without the United States shall be determined by allocating and apportioning— any deduction allowed under section 250(a)(1)(B) (and any deduction allowed under section 164(a)(3) for taxes imposed on amounts described in section 250(a)(1)(B)) to such income, no amount of interest expense or research and experimental expenditures to such income, and any other deduction to such income only if such deduction is directly allocable to such income. Any amount or deduction which would (but for subparagraphs
(B)and (C)) have been allocated or apportioned to such income shall only be allocated or apportioned to income which is from sources within the United States. . Section 904(d)(2)(H)(i) is amended by striking paragraph (1)(B) and inserting paragraph (1)(D) . Section 904(d)(4)(C)(ii) is amended by striking paragraph (1)(A) and inserting paragraph (1)(C) . Section 951A(f)(1)(A) is amended by striking 904(h)(1) and inserting 904(h) . The amendments made by this section shall apply to taxable years beginning after December 31, 2025.