[Federal Register Volume 85, Number 220 (Friday, November 13, 2020)]
[Rules and Regulations]
[Page 72564]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23632]



[[Page 72564]]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9909]
RIN 1545-BP35


Limitation on Deduction for Dividends Received From Certain 
Foreign Corporations and Amounts Eligible for Section 954 Look-Through 
Exception; Correcting Amendment

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

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SUMMARY: This document contains corrections to the final regulations 
(Treasury Decision 9909) that were published in the Federal Register on 
Thursday, August 27, 2020. Treasury Decision 9909 contained final 
regulations under sections 245A and 954 of the Internal Revenue Code 
(the ``Code'') that limit the deduction for certain dividends received 
by United States persons from foreign corporations under section 245A 
and the exception to subpart F income under section 954(c)(6) for 
certain dividends received by controlled foreign corporations.

DATES: These corrections are effective on November 13, 2020.

FOR FURTHER INFORMATION CONTACT: Arielle M. Borsos or Logan M. 
Kincheloe at (202) 317-6937 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations (TD 9909) that are the subject of this 
correction are issued under sections 245A, 954(c)(6), and 6038 of the 
Internal Revenue Code.

Need for Correction

    As published on August 27, 2020 (85 FR 53068), the final 
regulations (TD 9909; FR Doc. 2020-18543) contain errors that need to 
be corrected.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Correction of Publication

    Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendments:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority:  26 U.S.C. 7805 * * *


0
Par. 2. Section 1.245A-5 is amended by:
0
a. Adding a sentence after the first sentence of paragraph 
(e)(3)(i)(A); and
0
b. Revising paragraphs (i)(8) and (9) and the first sentence of 
paragraph (j)(10)(ii).
    The addition and revisions read as follows:


Sec.  1.245A-5   Limitation of section 245A deduction and section 
954(c)(6) exception.

* * * * *
    (e) * * *
    (3) * * *
    (i) * * *
    (A) * * * Because the determination as to whether there would be an 
extraordinary reduction amount or tiered extraordinary reduction amount 
greater than zero is made without regard to this paragraph (e)(3)(i), 
this determination is made without taking into account any elections 
that may be available, or other events that may occur, solely by reason 
of an election described in this paragraph (e)(3)(i), such as the 
application of section 954(b)(4) to a short taxable year created as a 
result of the election. * * *
* * * * *
    (i) * * *
    (8) Extraordinary disposition E&P. The term extraordinary 
disposition E&P has the meaning set forth in paragraph (c)(3)(i)(C) of 
this section.
    (9) Extraordinary disposition ownership percentage. The term 
extraordinary disposition ownership percentage has the meaning set 
forth in paragraph (c)(3)(i)(B) of this section.
* * * * *
    (j) * * *
    (10) * * *
    (ii) * * * Because the loan from CFC1 to CFC2 and the subsequent 
distribution of cash were carried out with a principal purpose of 
avoiding the purposes of this section, appropriate adjustments are 
required to be made under the anti-abuse rule in paragraph (h) of this 
section. * * *

Crystal Pemberton,
Senior Federal Register Liaison, Publications and Regulations Branch, 
Legal Processing Division, Associate Chief Counsel (Procedure and 
Administration).
[FR Doc. 2020-23632 Filed 11-12-20; 8:45 am]
BILLING CODE 4830-01-P