Page 739 - Large Business IRS Training Guides

E&P
Adjustments Due to Sections 965(a) and (b)

• If a section 958(a) U.S. shareholder has a section 965(a) inclusion with respect
to a DFIC,
the section 959(c)(2) E&P of the DFIC with respect to the shareholder
an amount equal to the section 965(a) inclusion amount,
is increased by
translated using the spot rate on 12/31/17 (“section 965(a)
PTEP”).

• The section 959(c)(3) E&P of the DFIC with respect to the section 958(a) U.S.
reduced by an amount equal to the section 965(a) PTEP.
shareholder is

• If a section 958(a) U.S. shareholder’s pro rata share of the section 965(a)
amount of a DFIC is reduced under section 965(b), the section
earnings
E&P of the DFIC with respect to the shareholder is increased by an
959(c)(2)
amount
equal to the amount of the reduction, translated using the spot rate on
12/31/17 (“section 965(b) PTEP”).

• The section 959(c)(3) E&P of the DFIC with respect to the section 958(a) U.S.

reduced (or, in the case of a deficit, increased) by an amount equal to
shareholder i s
the section 965(b) PTEP.

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