[Federal Register Volume 60, Number 42 (Friday, March 3, 1995)]
[Proposed Rules]
[Pages 11950-11951]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5285]



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DEPARTMENT OF THE TREASURY
26 CFR Part 1

[INTL-933-86]
RIN 1545-AL98


Computation of Foreign Taxes Deemed Paid Under Section 902 
Pursuant to a Pooling Mechanism for Undistributed Earnings and Foreign 
Taxes; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to notice of proposed rulemaking.

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SUMMARY: This document contains corrections to the notice of proposed 
rulemaking [INTL-933-86] which was published in the Federal Register 
for Friday, January 6, 1995 (60 FR 2049). The proposed regulations 
relate to the computation of foreign taxes deemed paid by a domestic 
corporate shareholder owning at least 10 percent of the voting stock of 
the foreign corporation.

FOR FURTHER INFORMATION CONTACT: Caren S. Shein (202) 622-3850, or 
Kristine K. Schlaman (202) 622-3840 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

    The proposed regulations that are the subject of these corrections 
are under section 902 of the Internal Revenue Code.

Need for Correction

    As published, the notice of proposed rulemaking [INTL-933-86] 
contains typographical errors that are in need of correction.

Correction of Publication

    Accordingly, the publication of the notice of proposed rulemaking 
which is the subject of FR Doc. 95-173, is corrected as follows:
    On pages 2056 and 2058, Sec. 1.902-1 is corrected by removing the 
formulas in paragraphs (b)(2)(i), (b)(2)(ii) and (d)(2)(i) and adding 
correctly revised formulas at the end of paragraphs (b)(1), (b)(2)(i), 
(b)(2)(ii) and (d)(2)(i) to read as follows:


Sec. 1.902-1  Credit for domestic corporate shareholder of a foreign 
corporation for foreign income taxes paid by the foreign corporation.

* * * * *
    (b) * * * (1) * * *


                                                                                                                
                                                                     Dividend paid to domestic shareholder (or  
Foreign income taxes deemed       Post 1986 foreign income             upper-tier corporation) by first-tier    
      paid by domestic               taxes of first-tier              corporation (or lower-tier corporation)   
 shareholder (or upper-tier   =  corporation (or lower-tier   x  -----------------------------------------------
        corporation)                    corporation)              Post-1986 undistributed earnings of first-tier
                                                                      corporation (or lower-tier corporation)   
                                                                                                                

    (2) * * * (i) * * *

                                                                                                                
  Portion of dividend to a                                                    Dividend to shareholder           
shareholder attributable to        Post-1986 undistributed       -----------------------------------------------
  post-1986 undistributed     =           earnings            x                                                 
          earnings                                                   Total dividends paid to all shareholders   
                                                                                                                

    (ii) * * *


                                                                                                                
[[Page 11951]]                                                                                                  
                                                                                                                
  Portion of dividend to a        Dividend paid out of pre-                   Dividend to shareholder           
shareholder attributable to       1987 accumulated profits       -----------------------------------------------
  accumulated profits of a    =      with respect to the      x                                                 
particular pre-1987 taxable          particular pre-1987             Total dividends paid to all shareholders   
            year                        taxable year                                                            
                                                                                                                

* * * * *
    (d) * * *
    (2) * * * (i) * * *

                                                                                                                
 Foreign taxes deemed paid        Post-1986 foreign income          Dividend amount attributable to a separate  
 by domestic shareholder or        taxes of first-tier or                            category                   
upper-tier corporation with        lower-tier corporation        -----------------------------------------------
   respect to a separate      =   allocated and apportioned   x   Post-1986 undistributed earnings of first-tier
   category under section          to a separate category          or lower-tier corporation attributable to the
           904(d)                    under Sec. 1.904-6                          separate category              
                                                                                                                

* * * * *
Cynthia E. Grigsby,
Chief, Regulations Unit, Assistant Chief Counsel (Corporate).
[FR Doc. 95-5285 Filed 3-2-95; 8:45 am]
BILLING CODE 4830-01-P