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Regulations: Dividend received deduction, branch loss recapture (section 245A)

Dividend received deduction, branch loss recapture

OMB’s Office of Information and Regulatory Affairs (OIRA) completed its review of U.S. Treasury Department regulations with respect to provisions under section 245A.


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The U.S. tax law enacted in December 2017—(Pub. L. No. 115-97) the law that is at times referred to as the “Tax Cuts and Jobs Act” (TCJA)—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.

OIRA reported that on June 4, 2019, it has completed review of the following regulations under section 245A:

Treasury regulations that are identified as “major” regulations are subject to review by OMB’s OIRA before being issued, pursuant to Executive Order 13771.

The U.S. Treasury Department and IRS will be expected to release these regulations, now that OIRA review has been concluded. The date when the regulations will be release is unknown.

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