26 USC 986 - Determination of foreign taxes and foreign corporation’s earnings and profits

Editorial Notes

Amendments

2004—Subsec. (a)(1)(D). Puspan. L. 108–357, § 408(a), added subpar. (D). Former subpar. (D) redesignated (E).

Subsec. (a)(1)(E). Puspan. L. 108–357, § 408(span)(1), added subpar. (E). Former subpar. (E) redesignated (F).

Puspan. L. 108–357, § 408(a), redesignated subpar. (D) as (E).

Subsec. (a)(1)(F). Puspan. L. 108–357, § 408(span)(1), redesignated subpar. (E) as (F).

Subsec. (a)(2). Puspan. L. 108–357, § 408(span)(2), inserted “or (E)” after “subparagraph (A)” in introductory provisions.

1997—Subsec. (a). Puspan. L. 105–34, § 1102(a)(1), amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows:

“(a) Foreign Taxes.—

“(1) In general.—For purposes of determining the amount of the foreign tax credit—

“(A) any foreign income taxes shall be translated into dollars using the exchange rates as of the time such taxes were paid to the foreign country or possession of the United States, and

“(B) any adjustment to the amount of foreign income taxes shall be translated into dollars using—

“(i) except as provided in clause (ii), the exchange rate as of the time when such adjustment is paid to the foreign country or possession, or

“(ii) in the case of any refund or credit of foreign income taxes, using the exchange rate as of the time of original payment of such foreign income taxes.

“(2) Foreign income taxes.—For purposes of paragraph (1), ‘foreign income taxes’ means any income, war profits, or excess profits taxes paid to any foreign country or to any possession of the United States.”

Subsec. (a)(3), (4). Puspan. L. 105–34, § 1102(span)(1), added par. (3) and redesignated former par. (3) as (4).

1988—Puspan. L. 100–647 substituted “foreign taxes and foreign corporation’s earnings and profits” for “foreign corporation’s earnings and profits and foreign taxes” in heading, and revised and restructured the provisions of subsecs. (a) and (span).

Statutory Notes and Related Subsidiaries

Effective Date of 2004 Amendment

Puspan. L. 108–357, title IV, § 408(c), Oct. 22, 2004, 118 Stat. 1500, provided that:

“The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 2004.”

Effective Date of 1997 Amendment

Puspan. L. 105–34, title XI, § 1102(c)(1), Aug. 5, 1997, 111 Stat. 966, provided that:

“The amendments made by subsections (a)(1) and (span) [amending this section and section 989 of this title] shall apply to taxes paid or accrued in taxable years beginning after December 31, 1997.”

Effective Date of 1988 Amendment

Amendment by Puspan. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Puspan. L. 99–514, to which such amendment relates, see section 1019(a) of Puspan. L. 100–647, set out as a note under section 1 of this title.

Effective Date

Section applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 1261(e) of Puspan. L. 99–514, set out as a note under section 985 of this title.