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New rules concerning limitations on U.S. tax benefits from operations in restricted countries

Article Abstract:

IRS Revenue Rulings 92-62 and 92-63 dealt with the IRC's limits on the earned-income exclusion and on the foreign tax credit for operations in restricted countries. Revenue Ruling 92-63 classified Iraq among the nations where US citizens cannot obtain the earned-income exclusion and stated that Albania, South Africa and the People's Democratic Republic of Yemen were no longer so classified. Foreign tax credits are obtainable once the Secretary of State has officially declared that a country is no longer on the restricted list.

Foreign operations, International business enterprises, Multinational corporations, Corporations, Earned income tax credit

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Proposed regulations address deconsolidations that avoid foreign tax credit limitations

Article Abstract:

The IRS has enacted IRC section 904(i) to limit the ability of consolidated return taxpayers to selectively deconsolidate subsidiaries in order to maximize foreign tax credits. Affiliated groups that include subsidiaries showing losses may wish to have some units deduct foreign tax and have some units claim foreign tax credits. Section 904(i) provides the IRS with the authority to require expanded affiliated groups to elect in unison to deduct foreign taxes or take tax credits.

Affiliated corporations

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Foreign tax credit limitation rules

Article Abstract:

Proposed IRS regulations deal with the limits on foreign tax credit imposed by IRC Section 904(d). The new rules, published on May 13, 1992 and in force for taxable years after 1991, are meant to cut interest and other costs pertaining to foreign-generated general limitation income while driving up interest and other expenses pertaining to foreign-generated passive income. The regulations also clarify the taxability of stock acquired from a controlled foreign corporation.

Controlled foreign corporations

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