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Regulations pending OIRA review: Proposed regulations under section 245A

Proposed regulations under section 245A

OMB’s Office of Information and Regulatory Affairs (OIRA) reported it has received for review from the U.S. Treasury Department proposed regulations as guidance under section 245A—a provision added to the Code by the 2017 tax law (Pub. L. No. 115-97) that is also known as the “Tax Cuts and Jobs Act” (TCJA).


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The 2017 tax law added new section 245A to establish a participation exemption system for the taxation of foreign income.

Section 245A allows a domestic corporation that is a U.S. shareholder (as defined in section 951(b)) of a specified 10% foreign corporation a 100% dividends received deduction (DRD) for the foreign-source portion of dividends received from the foreign corporation (a 100% DRD). The 100% DRD is available only to domestic C corporations that are neither real estate investment trusts nor regulated investment companies.

According to OIRA, the proposed regulations were received for review on May 29, 2019, and are identified as follows:

OIRA, earlier this month, reported having received for review from the U.S. Treasury Department an “interim final rule” as guidance under sections 91 and 245A, concerning DRD issues under section 245A and branch loss recapture issues under section 91. Read TaxNewsFlash

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