Page 721 - Large Business IRS Training Guides

Section 965(c)
Deduction: Example 1

• USP
is a section 958(a) U.S. shareholder of a

single corporation, a DFIC.

• Section 965(a) requires USP to include $100

in gross income.

• USP’s AFCP
is $40.

• USP’s deduction under section 965(c) is

• the 15.5 percent
rate equivalent percentage of $40
(the lesser of
$40 or $100)

• plus
the 8 percent rate equivalent percentage of
$60 ($100 – $40).

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