Page 781 - Large Business IRS Training Guides

Pro Rata Share, E&P
Deficit
& Internal Group Transactions
(cont’d)

deficit transaction is a transfer to a U.S.
• An E&P
shareholder
or a person related to the U.S. shareholder of
the stock of an EPDFC
by a person related to the U.S.

if the transfer would, without regard to the anti-
shareholder
abuse rule, increase the U.S.
shareholder’s pro rata share
deficit of the EPDFC.
of the specified E&P

• An
internal group transaction, which is a pro rata share

transaction if,
immediately before or after the transfer, the
and the transferee of the SFC’s stock are
transferor
members of
an affiliated group in which a U.S. shareholder
is treated per se as undertaken with a
is a member,

principal
purpose of changing the amount of a section 965
element.

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