Page 762 - Large Business IRS Training Guides

Section 965(h)
Election

section 958(a) U.S. shareholder or any owner of a domestic pass-through
• Any
entity
that is a section 958(a) U.S. shareholder (but not the domestic pass-through
itself) may elect to pay its net tax liability under section 965 in interest-free
entity
over a period of 8 years.
installments

net tax liability would be due in each of the first 5
• 8% of the section 965(h)
years;

would be due in year 6;
• 15%
• 20%
would be due in year 7; and
would be due in year 8.
• 25%

the due date (including extensions, even if no
• The election must be made by
request for
additional time was made) for filing the return for the relevant year.

available under Treas. Reg. §301.9100-2 or -3 to file a late election.
• Relief not

section 965(h) may be due sooner if an acceleration event
• Tax deferred under
occurs.

• In certain instances, an acceleration event will not accelerate payment of the

tax if 84
a transfer agreement is timely filed.