Tax Reform Series 42 – Foreign Tax Credit Limitation Baskets


Plain Language of Change:

  • The Act creates a new FTC limitation basket for foreign branch income

  • Foreign branch income is the business profits of a U.S. person which are attributable to one or more qualified business units (QBUs) in one or more foreign countries

  • Business profits of a QBU shall not, however, include any income which is passive category income

Detailed Analysis of Foreign Tax Credit Limitation Baskets

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