Page 700 - Large Business IRS Training Guides

Specified Foreign Corporation (SFC)

controlled foreign corporation (“CFC”),
• An SFC is (1) a

or (2) a foreign corporation (other than a passive foreign

(“PFIC”)) that has a corporate U.S.
investment company

shareholder.

a foreign corporation greater than 50% directly,
• A CFC i s

owned, by vote or value, by one
indirectly, or constructively
at any time during the taxable
or more U.S. shareholders

year of the corporation.

no section 965(a) inclusion.

• If FC is not an SFC

• Thus, the starting point
in determining whether there is a

section 965 inclusion is to identify
whether there are any

SFCs and section 958(a)
U.S. shareholders.

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