Guidance Related to Section 951A (Global Intangible Low-Taxed Income) and Certain Guidance Related to Foreign Tax Credits, 44223 [C1-2019-12437]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 84, Number 164 (Friday, August 23, 2019)]
[Rules and Regulations]
[Page 44223]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: C1-2019-12437]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 84, No. 164 / Friday, August 23, 2019 / Rules 
and Regulations

[[Page 44223]]



DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9866]
RIN 1545-BO54; 1545-BO62


Guidance Related to Section 951A (Global Intangible Low-Taxed 
Income) and Certain Guidance Related to Foreign Tax Credits

Correction

    In rule document 2019-12437, appearing on pages 29288 through 
29370, in the issue of Friday, June 21, 2019 make the following 
corrections:
    1. On page 29337, Table 1 to paragraph (b)(2)(iv)(B) should appear 
as follows:

                   Table 1 to Paragraph (b)(2)(iv)(B)
 
 
 
M's subpart F income for Year 1.................................   $100x
Less: Reduction under section 951(a)(2)(A) for period (1-1           40x
 through 5-26) during which M is not a controlled foreign
 corporation ($100x x 146/365)..................................
                                                         ---------------
Subpart F income for Year 1 as limited by section 951(a)(2)(A)..     60x
A's pro rata share of subpart F income as determined under           36x
 section 951(a)(2)(A) (0.6 x $60x)..............................
Less: Reduction under section 951(a)(2)(B) for dividends
 received by B during Year 1 with respect to the stock of M
 acquired by A:
  (i) Dividend received by B ($15x), multiplied by a         15x
   fraction ($100x/$100x), the numerator of which is the
   subpart F income of such corporation for the taxable
   year ($100x) and the denominator of which is the sum
   of the subpart F income and the tested income of such
   corporation for the taxable year ($100x) ($15x x
   ($100x/$100x)).......................................
  (ii) B's pro rata share (60%) of the amount which          24x
   bears the same ratio to the subpart F income of such
   corporation for the taxable year ($100x) as the part
   of such year during which A did not own (within the
   meaning of section 958(a)) such stock bears to the
   entire taxable year (146/365) (0.6 x $100x x (146/
   365))................................................
  (iii) Amount of reduction under section 951(a)(2)(B)               15x
   (lesser of (i) or (ii))..............................
                                                                 -------
A's pro rata share of subpart F income as determined under           21x
 section 951(a)(2)..............................................
 

    2. On page 29338, Table 1 to paragraph (b)(2)(vi)(B)(1) should 
appear as follows:

                  Table 1 to paragraph (b)(2)(vi)(B)(1)
 
 
 
R's subpart F income for Year 1.................................   $100x
Less: Reduction under section 951(a)(2)(A) for period (1-1           20x
 through 3-14) during which R is not a controlled foreign
 corporation ($100x x 73/365)...................................
                                                         ---------------
Subpart F income for Year 1 as limited by section 951(a)(2)(A)..     80x
A's pro rata share of subpart F income as determined under           48x
 section 951(a)(2)(A) (0.6 x $80x)..............................
Less: Reduction under section 951(a)(2)(B) for dividends
 received by B during Year 1 with respect to the stock of R
 indirectly acquired by A:
  (i) Dividend received by B ($100x) multiplied by a         25x
   fraction ($100x/$400x), the numerator of which is the
   subpart F income of such corporation for the taxable
   year ($100x) and the denominator of which is the sum
   of the subpart F income and the tested income of such
   corporation for the taxable year ($400x) ($100x x
   ($100x/$400x)).......................................
  (ii) B's pro rata share (60%) of the amount which          12x
   bears the same ratio to the subpart F income of such
   corporation for the taxable year ($100x) as the part
   of such year during which A did not own (within the
   meaning of section 958(a)) such stock bears to the
   entire taxable year (73/365) (0.6 x $100x x (73/365))
  (iii) Amount of reduction under section 951(a)(2)(B)               12x
   (lesser of (i) or (ii))..............................
                                                                 -------
A's pro rata share of subpart F income as determined under           36x
 section 951(a)(2)..............................................
 

    3. On the same page, Table 1 to paragraph (b)(2)(vi)(B)(2) should 
appear as follows:

                  Table 1 to paragraph (b)(2)(vi)(B)(2)
 
 
 
R's tested income for Year 1....................................   $300x
Less: Reduction under section 951(a)(2)(A) for period (1-1           60x
 through 3-14) during which R is not a controlled foreign
 corporation ($300x x 73/365)...................................
                                                         ---------------
Tested income for Year 1 as limited by under section                240x
 951(a)(2)(A)...................................................
A's pro rata share of tested income as determined under Sec.        144x
 1.951A-1(d)(2) (0.6 x $240x)...................................
Less: Reduction under section 951(a)(2)(B for dividends received
 by B during Year 1 with respect to the stock of R indirectly
 acquired by A:
  (i) Dividend received by B ($100x) multiplied by a         75x
   fraction ($300x/$400x), the numerator of which is the
   tested income of such corporation for the taxable
   year ($300x) and the denominator of which is the sum
   of the subpart F income and the tested income of such
   corporation for the taxable year ($400x) ($100x x
   ($300x/$400x)).......................................
  (ii) B's pro rata share (60%) of the amount which          36x
   bears the same ratio to the tested income of such
   corporation for the taxable year ($300x) as the part
   of such year during which A did not own (within the
   meaning of section 958(a)) such stock bears to the
   entire taxable year (73/365) (0.6 x $300x x (73/365))
  (iii) Amount of reduction under section 951(a)(2)(B)               36x
   (lesser of (i) or (ii))..............................
                                                                 -------
A's pro rata share of tested income under section 951A(e)(1)....    108x
 

 [FR Doc. C1-2019-12437 Filed 8-22-19; 8:45 am]
 BILLING CODE 1300-01-D