Page 746 - Large Business IRS Training Guides

Example 2: Direct
foreign taxes attributable to

distributions of
section 965(a) PTEP

• Same facts as prior slide.

• In addition:

USP • In 2017, CFC distributes $200,
to a $20 withholding tax by
subject
$180 Country Y.

($20 wht) • Such distribution is section 965(a)

PTEP.
CFC • USP may
credit $7.15 of the

withholding tax imposed by

Country Y ($20 * (1-64.26%))

• If instead, CFC distributes $200 and

withholds
$20 in a year after 2017,
USP would be entitled to credit $7.15
in that year.

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