TAX 9869 Lecture 61: Foreign Base Company Income
Document Summary
Foreign base company income sec 954: generally the us does not tax foreign corporation on income not effectively connected with a. Accordingly the rules allow for deferral of us tax where the cfc carries on business in the same country as it was organized. Category i: foreign personal holding company income (fphci) Section 954(c) includes the following as fphci: dividends, interest (including income equivalent to interest), royalties, annuities and rents, certain property transactions, commodities transactions, foreign currency gains, income from notional principal contracts, payments in lieu of dividends. 954 does not define dividends, and therefore, sec. 959(b) excludes dividends paid from a lower tier subsidiary that is also a cfc and has income that is taxable to the us shareholder. 954(c)(6) dividend look through exception set to expire at the end of 2013. Includes oid and imputed interest under sections 483 and 7872.
