Page 27 - International Taxation IRS Training Guides

Intro to Outbound:
FTC

Shareholders

CFC:

• Current U.S. tax at
USP:
35% rate on

Current U.S. tax at 35% rate on
“subpart F

income earned at U.S.P level,
USP income,”

potentially reduced by FTCs
potentially reduced

(limited by baskets)
by FTCs (limited

by baskets)

• Income increased
USP/Branch: Foreign by gross-up for
Current U.S. tax at Branch CFC foreign taxes

35% rate on income deemed paid

earned at
foreign
branch level, • U.S. tax
at 35% on
potentially reduced by dividend with

FTCs (limited by respect to

residual
baskets) foreign earnings

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