View all text of Subpart A [§ 901 - § 909]
§ 909. Suspension of taxes and credits until related income taken into account
(a) In general
(b) Special rules with respect to specified 10-percent owned foreign corporations
If there is a foreign tax credit splitting event with respect to a foreign income tax paid or accrued by a specified 10-percent owned foreign corporation (as defined in section 245A(b) without regard to paragraph (2) thereof), such tax shall not be taken into account—
(1) for purposes of section 960, or
(2) for purposes of determining earnings and profits under section 964(a),
before the taxable year in which the related income is taken into account under this chapter by such specified 10-percent owned foreign corporation or a domestic corporation which is a United States shareholder with respect to such specified 10-percent owned foreign corporation.
(c) Special rules
For purposes of this section—
(1) Application to partnerships, etc.
In the case of a partnership, subsections (a) and (b) shall be applied at the partner level. Except as otherwise provided by the Secretary, a rule similar to the rule of the preceding sentence shall apply in the case of any S corporation or trust.
(2) Treatment of foreign taxes after suspension
(d) Definitions
For purposes of this section—
(1) Foreign tax credit splitting event
(2) Foreign income tax
(3) Related income
(4) Covered person
The term “covered person” means, with respect to any person who pays or accrues a foreign income tax (hereafter in this paragraph referred to as the “payor”)—
(A) any entity in which the payor holds, directly or indirectly, at least a 10 percent ownership interest (determined by vote or value),
(B) any person which holds, directly or indirectly, at least a 10 percent ownership interest (determined by vote or value) in the payor,
(C) any person which bears a relationship to the payor described in section 267(b) or 707(b), and
(D) any other person specified by the Secretary for purposes of this paragraph.
(e) Regulations
The Secretary may issue such regulations or other guidance as is necessary or appropriate to carry out the purposes of this section, including regulations or other guidance which provides—
(1) appropriate exceptions from the provisions of this section, and
(2) for the proper application of this section with respect to hybrid instruments.
(Added Pub. L. 111–226, title II, § 211(a), Aug. 10, 2010, 124 Stat. 2394; amended Pub. L. 115–97, title I, § 14301(c)(29), (30), Dec. 22, 2017, 131 Stat. 2224.)