Page 30 - International Taxation IRS Training Guides

FTC Basics
– Expense Allocation

 U.S.-based MNEs may
seek to maximize foreign tax
and reduce their ETR through expense
credits

allocation to income.

expense is considered to relate to all income,
 Interest
be apportioned to each category based on
and must

the relative value (or tax
basis) of the assets that

produce income in that
category.

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