The changes, contained in the American Jobs Creation Act (AJCA) of 2004, generally reduced the number of separate categories under section 904(d) from eight to two, effective for tax years beginning after Dec. 31, 2006. The AJCA also added section 904(g), which provides for recharacterization of U.S.-source income as foreign-source income in cases in which a taxpayer’s foreign tax credit limitation has been reduced in an earlier year as the result of an overall domestic loss.
Comments on the revised Form 1118 can be mailed to Tax Products Coordinating Committee, Internal Revenue Service, SE:W:CAR:MP:T, Room 6406, 1111 Constitution Ave., N.W., Washington, DC 20224, or e-mailed to firstname.lastname@example.org . Comments must be received by Sept. 10. The proposed revisions can be viewed at www.irs.gov/taxpros/lists/0,,id=97782,00.html .