Page 386 - Large Business IRS Training Guides

GILTI and FDII
Side-by-Side (cont’d) 1

GILTI
and FDII are like two sides of the same coin

Tested Income is a CFC’s gross Deduction Eligible Income (DEI) is
U.S.-source effectively
the domestic corp’s gross
income less defined as
connected income, gross income less
income that
subpart F and section
is taken into account in determining 956 income,
GILTI inclusions, CFC
income, gross income
subpart F dividends,
domestic oil and gas
the high tax exception
excluded under extraction income, foreign branch
in section 954(b)(4), related party income,

and financial services
less allocable deductions
and foreign oil and gas
dividends, income,
extraction income, less
deductions
that are properly
(including taxes)
allocable to gross tested income

Foreign-Derived portion of
GILTI = FDII =
U.S. shareholder’s net CFC

Tested Income less Net Deemed Deduction Eligible Income (DEI) less
Tangible Income Return (Net DTIR) Deemed Tangible Income Return

(DTIR)

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