Section 904 of the Code requires the calculation of taxable income from foreign sources in various categories (or "baskets") to determine the maximum allowable foreign tax credit
The district court held that the taxpayer's claim was untimely because the 10-year limitation period applies only to refunds based on the use of the foreign tax credit
, and the company's 1995 refund claim was not attributable to taxes paid in its 2002 tax year.
Jobs Act made major changes to the foreign tax credit
, effective in
Tax relief through the foreign tax credit
(or a foreign tax deduction) won't help, though, if you hold a foreign stock fund in a tax-deferred account such as an IRA.
Thus, the taxpayer's maximum allowable foreign tax credit
from FOGEI and FORI is 23.8% x $350,000, or $83,300.
The foreign tax credit
(FTC) is designed to prevent the double taxation of income that often results from international transactions.
The notice provides guidance on the application of the new look-through rules and the transition from the previous treatment The transition issues addressed include the carryover and carry-back of excess foreign tax credits
and the treatment of separate limitation losses and overall foreign losses.
The proposed GILTI and foreign tax credit
regulations provided critical guidance for tax executives adjusting to the new U.S.
901 (or claim a deduction in lieu of a foreign tax credit
) at any time before the expiration of the period prescribed by Sec.
The final regulations provide that amounts paid to a foreign taxing authority that are attributable to a "structured passive investment arrangement" are not treated as an amount of tax paid for purposes of the foreign tax credit
. Structured passive investment arrangements are generally designed to exploit differences between U.S.
The 5,409 corporations claiming a foreign tax credit
for 2003 earned $424.5 billion in worldwide taxable income and paid $140.5 billion in worldwide income taxes.
Foreign tax credit
abuse is among the top IRS compliance concerns for large corporate taxpayers.