Page 44 - Large Business IRS Training Guides

BE%
– The Denominator (cont’d)

• Total deductions in the denominator also do not include –

• payment or
accrual for services to related foreign person
not
treated as BEP under section 59A(d)(5) (SCM
exception)

• deduction for
qualified derivative payment not treated as
under section 59(h)
BEP

amounts paid or accrued with respect to
• deduction for
securities
TLAC

• However, if a payment in any of the three (3) items above

qualifies for the ECI exception and the amount is paid to

an FRP that is not in the aggregate group, then that

payment is included in the denominator of BE%

• Reminder: Transactions between members of an

aggregate group are not included in computing BE%

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