Final foreign tax credit regulations on overall domestic losses and overall foreign losses provide certainty, flexibility

Washington National Tax Services

The IRS recently issued final regulations under sections 904(f) and (g) that implement the overall domestic loss (ODL) regime enacted in the American Jobs Creation Act of 2004. The regulations also provide updates that reflect statutory amendments to the overall foreign loss (OFL) rules enacted since 1986.

The IRS also issued proposed regulations that clarify the calculation of the high-taxed income provision of section 904 and address the coordination of the OFL recapture provisions when those provisions require recognition of gain as a result of a disposition of property.

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