Overview of Foreign Tax Credit

Cover the Foreign Tax Credit Rules and key concepts.

• Identify eligible foreign tax credits
• Recognize the value of foreign tax credits
• Apply key foreign tax concepts
• Calculate foreign tax credit and limitation
• Explain some of the complexities with OFL, ODL
• Identify foreign tax credit issues in client discussions
• Understand purpose and approach of Section 861
• Explain allocation/apportionment methods available for interest, R&E, and other relevant expenses
• Calculate allocation of expenses under standard and alternative methods
• Explain impact of branches and CFC netting rule on expense allocations and apportionment
• Describe the operation of the section 909 rules
• Identify when the section 909 rules apply
• Show applicability and impact of section 901(m) and relationship to section 338 elections

• Summary of the FTC rules
• Sections 901, 902, and 960
• Separate Basket FTC Limitations and Look-Through Rules, Separate Limitation Losses
• Overall Foreign Loss (OFL)
• Overall Domestic Loss (ODL)
• Indirect credit and lower tier subsidiaries
• Review of Section 861 rules
• Alternative allocation methods available
• CFC netting rules
• Tax book value methods
• Impact of branches on expense allocations
• Cover splitter structures and impact on FTC
• Impact from 901(m)