Daily Tax Report ®

IRS Working on Guidance for Expense Allocation Election

Jan. 13, 2021, 8:59 PM

The IRS is writing guidance to implement a pre-2017 tax law election that lets companies use a different method of allocating interest expenses when calculating their limit on foreign tax credits, an agency official said.

The election, under tax code Section 864(f), allows companies to allocate their interest expenses on a worldwide basis, which would take income and expenses of controlled foreign corporations into account and make more foreign tax credits available in certain situations.

  • The agency has created a working group that is developing a list of issues to address in future regulations, said Barbara Felker, branch...

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