Page 171 - International Taxation IRS Training Guides

Transition Tax: Rate

with an inclusion under IRC 965
 US shareholder
allowed a participation deduction intended to result in

rate to the extent
the inclusion being taxed at a 15.5%

shareholder’s aggregate foreign
attributable to the US
cash position (generally,
the sum of its pro rata shares

SFCs’ cash positions), and at 8% otherwise
of i t s

and
• SFC’s cash position consists of cash, net accounts receivable,
the FMV
of the cash-equivalent assets held by the SFC

 Reduced foreign tax credit applies to the inclusion to

mirror the reduced tax rates applied pursuant to the

participation deduction

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