Page 37 - Large Business IRS Training Guides

BEP – TLAC
Exception

Any amounts paid or accrued to FRPs with respect to TLAC

securities are not BEPs (subject to the limitation below) –

• A TLAC security is an eligible internal debt security as defined in
252.161
12 CFR
The amount excluded from BEP treatment is no
• Limitation:
greater
than the scaling ratio x amounts paid or accrued to
foreign related parties
with respect to TLAC securities for which
a deduction is
allowed
• Scaling ratio for
a taxable year = average TLAC long-term debt
required amount / average TLAC
securities amount, may not be
than one
greater
amount = average of the TLAC securities

• Average TLAC securities
for the year, computed on a monthly basis
amounts

debt required amount = average of the
• Average TLAC long-term

debt required amounts for the year, computed on a
TLAC long-term
monthly basis

35