Close
Close

Proposed rules on foreign tax credits provide broad guidance

RFP
Tax Hot Topics newsletterThe IRS released extensive proposed regulations (REG-105600-18) on Nov. 28 to implement changes to the foreign tax credit regime brought about by the Tax Cuts and Jobs Act (TCJA), providing much needed relief in some areas but not going as far as some taxpayers had hoped in others.

The proposed regulations were released under Sections 78, 861, 901, 904, 954, 960, and 965. Although they primarily implement changes made by the TCJA, they address other foreign tax credit issues and statutory changes pre-dating it as well. The regulations also provide guidance on the application of an election to forgo the use of net operating losses when computing an inclusion under Section 965. In addition to the breadth of the guidance, many of the rules are proposed to be retroactively effective for tax years beginning after Dec. 22, 2017. As such, taxpayers should carefully assess how the proposed regulations impact their specific tax circumstances.

For more details, see our Tax Flash.

Contact
David Sites
Partner
Washington National Tax Office 
Grant Thornton LLP
T +1 202 861 4104

David Zaiken
Managing Director
Washington National Tax Office 
Grant Thornton LLP
T +1 202 521 1543

Cory Perry
Senior Manager
Washington National Tax Office 
Grant Thornton LLP
T +1 202 521 1509

Mike Del Medico
Manager
Washington National Tax Office 
Grant Thornton LLP
T +1 202 521 1522

Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.