Restoration of Limitation on Downward Attribution of Stock Ownership |
Downward attribution allowed U. S. persons to be treated as owning stock held by foreign persons. |
Downward attribution is limited; U. S. persons are not treated as owning stock held by foreign persons. |
Reduces the number of unintended CFCs, simplifying compliance and reducing reporting burdens. |
Modification of Pro Rata Share Rules for Subpart F Income |
Pro rata share rules were based on year-end ownership. |
Pro rata share is based on periods of ownership during the year, aligning with Section 951A. |
More accurately matches income inclusions to periods of actual ownership, reducing potential for manipulation. |
Sourcing Rules for Inventory Sales |
Income from inventory produced in the U. S. and sold abroad was U. S.- sourced. |
Up to 50 % of such income can be treated as foreign-sourced if sold through a foreign branch. |
Increases foreign-source income, potentially increasing FTC limitation and reducing U. S. tax on exports. |