Page 406 - Large Business IRS Training Guides

Allocation and Apportionment
of Expenses

are generally allocated and apportioned to DEI and gross
• Expenses
under sections 1.861-8 through 1.861-14T and 1.861-17.

FDDEI But
rules.
there are some special
• While certain GILTI
and FDII assets and income are treated as exempt
for purposes
of the foreign tax credit limitation, this rule does not apply
for purposes
of computing FDII.
• Exclusive geographic
apportionment of research and experimentation
inapplicable for apportioning those expenses to FDII.
expense is
• The expense allocation rules
are complex but:

• Many
expenses are directly allocated to the gross income to which they
relate under section 1.861-8.
factually
• Some expenses
cannot be factually related, such as interest and
These expenses are
research and experimentation expenses.
special rules under -9T through 14T and -17.
apportioned under

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