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

Building client loyalty with payroll services

In this report, CPA experts detail their tactics for performing successful payroll services, how to mitigate risk in the process, and the impact payroll can have as a value-added service.

PODCAST

Using drones to enhance audits

Hermann Sidhu, CPA, global assurance digital leader at EY, walks us through EY’s exciting new project to use drones to help audit large warehouses and outdoor inventories.