Page 778 - Large Business IRS Training Guides

E&P
Reduction Transactions &

Specified Transactions

E&P reduction transaction is presumed to be undertaken with a
• An
purpose of changing the amount of a section 965 element of
principal
a U.S.
shareholder, unless the transaction occurs in the ordinary
course of
business.

• An E&P
reduction transaction means:

• A transaction between an SFC and any of a U.S. shareholder of
the SFC,
another SFC of a U.S. shareholder of the SFC, or any
shareholder of the SFC, if the
person related to the U.S.
without regard to the anti-abuse rule, reduce
transaction would,
the DFI or the post-1986 undistributed earnings (as defined
either
in section 902(c)(1))
of the SFC or another SFC of any U.S.
of such SFC.
shareholder

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