Page 696 - Large Business IRS Training Guides
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Why Section 965 Exists:
Pre-TCJA Example
• FC is formed on 1/1/2001
earns 100 yen
• In 2001, FC
E&P increases by 100
• FC’s
• No U.S. taxation yet
distributes 100 yen
• In 2005, FC
in its
to USP and USP includes it
taxable income
• FC’s
E&P decreases by 100 yen
* Example assumes USP has no subpart F or section
956 inclusions
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