Question

What are examples of US based deductible expenses that could cause negative consequences with using foreign tax credits under Subpart F and/or GILTI? (list 2)

Answer 1

Examples of US based deductible expenses that could cause negative consequences with using foreign tax credit under Subpart F and/o GILTI

• You paid the tax to a country for which a credit is not allowed because it provides support for acts of international terrorism, or because the United States does not have or does not conduct diplomatic relations with it or recognize its government and that government is not otherwise eligible to purchase defense articles or services under the Arms Export Control Act.

• You paid withholding tax on dividends from foreign corporations whose stock you did not hold for the required period of time.

• You paid withholding tax on income or gain (other than dividends) from property you did not hold for the required period of time.

• You paid withholding tax on income or gain to the extent you had to make related payments on positions in substantially similar or related property.

• You participated in or cooperated with an international boycott.

• You paid taxes in connection with the purchase or sale of oil or gas.

• You paid or accrued taxes on income or gain in connection with a covered asset acquisition.