Page 610 - Large Business IRS Training Guides

Pro rata share rule

Pro rata share

• Amount
determined “under the rules of
USP1
USP2

section 951(a)(2) in the same manner as
to subpart F
such section applies
65% 35% income.” §951A(e)(1).

• Subpart F
income – Proportionate to the
that would be received by the
CFC amount
shareholder in a year-end hypothetical

distribution of
all the CFC’s current-year
a pro rata share of
• USP1 has earnings
relative to all the current-year
65% of earnings.
CFC’s items.
§1.951-1(b).
• USP2 has • GILTI items
a pro rata share of
– Generally, the same as the
CFC’s items
35% of
subpart F
income rule but with some
§1.951A-1(d).
modifications.

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