Anti-splitter rules finalized


The IRS issued regulations under Sec. 909 regarding the foreign tax credit splitter rules. Under Sec. 909, if a foreign tax credit splitting event occurs with respect to a foreign income tax paid or accrued by a taxpayer, the taxpayer cannot take the foreign tax into account for federal income tax purposes before the tax year in which the taxpayer takes the related income into account (T.D. 9710). The new regulations finalize with a few minor clarifications the temporary regulations issued under Sec. 909 in 2012.

Included in the clarifications are changes to the definitions of reverse-hybrid splitter arrangements, loss-sharing splitter arrangements, and hybrid-instrument splitter arrangements and to the interim mechanical rules for tracking split taxes and related income. The preamble to the regulations notes that the regulations do not address other mechanical issues and that the IRS is still considering these issues and will address them in future guidance.

These final rules apply to tax years ending after Feb. 9, 2015.

SPONSORED REPORT

Revenue recognition: A complex effort

Implementing the new standard requires careful judgment. Learn how to make significant accounting judgments and document them and collaborate with peers for consistent application.

VIDEO

How to Excel pivot a general ledger

The general ledger is a vast historical data archive of your company's financial activities, including revenue, expenses, adjustments, and account balances. J. Carlton Collins, CPA, shows how to prepare data for, and mine data with, PivotTables.

QUIZ

News quiz: Taking an economic snapshot and looking to the future

Recent news included IRS actions that affect individuals and partnerships and a possibly influential move by a Big Four accounting firm.Take this short quiz to see how much you know about the news.