Foreign Tax Credit Proposed Regulations Roadmap
The 2017 tax act (Pub. L. No. 115-97) made several significant changes to the foreign tax credit rules and related rules for allocating and apportioning expenses for purposes of determining the foreign tax credit limitation. Specifically, the act repealed the fair market value method of asset valuation for purposes of allocating and apportioning interest expense under §864(e)(2), added §904(b)(4), which provides guidance for the treatment of dividends for which a deduction is allowed under new §245A; added two new foreign tax credit limitation categories to §904(d), one for foreign branch income and one for global low-taxed intangible income (GILTI) inclusions under new §951A; amended §960(a) through §960(c), added §960(d) through §960(f), with respect to foreign tax credits for deemed paid subpart F inclusions and GILTI inclusions; and repealed §902 along with making several conforming changes. The act also added §951A, which requires a U.S. shareholder of a controlled foreign corporation (CFC) to include global intangible low-taxed income (GILTI) in income.