26 U.S.C. § 959
Exclusion from gross income of previously taxed earnings and profits
# (a) Exclusion from gross income of United States persons
For purposes of this chapter, the earnings and profits of a foreign corporation attributable to amounts which are, or have been, included in the gross income of a United States shareholder under section 951(a) shall not, when— (1) such amounts are distributed to, or (2) such amounts would, but for this subsection, be included under section 951(a)(1)(B) in the gross income of, such shareholder (or any other United States person who acquires from any person any portion of the interest of such United States shareholder in such foreign corporation, but only to the extent of such portion, and subject to such proof of the identity of such interest as the Secretary may by regulations prescribe) directly or indirectly through a chain of ownership described under section 958(a), be again included in the gross income of such United States shareholder (or of such other United States person). The rules of subsection (c) shall apply for purposes of paragraph (1) of this subsection and the rules of subsection (f) shall apply for purposes of paragraph (2) of this subsection.
# (b) Exclusion from gross income of certain foreign subsidiaries
For purposes of section 951(a), the earnings and profits of a controlled foreign corporation attributable to amounts which are, or have been, included in the gross income of a United States shareholder under section 951(a), shall not, when distributed through a chain of ownership described under section 958(a), be also included in the gross income of another controlled foreign corporation in such chain for purposes of the application of section 951(a) to such other controlled foreign corporation with respect to such United States shareholder (or to any other United States shareholder who acquires from any person any portion of the interest of such United States shareholder in the controlled foreign corporation, but only to the extent of such portion, and subject to such proof of identity of such interest as the Secretary may prescribe by regulations).
# (c) Allocation of distributions
For purposes of subsections (a) and (b), section 316(a) shall be applied by applying paragraph (2) thereof, and then paragraph (1) thereof— (1) first to the aggregate of— (A) earnings and profits attributable to amounts included in gross income under section 951(a)(1)(B) (or which would have been included except for subsection (a)(2) of this section), and (B) earnings and profits attributable to amounts included in gross income under section 951(a)(1)(C) (or which would have been included except for subsection (a)(3) of this section), with any distribution being allocated between earnings and profits described in subparagraph (A) and earnings and profits described in subparagraph (B) proportionately on the basis of the respective amounts of such earnings and profits, (2) then to earnings and profits attributable to amounts included in gross income under section 951(a)(1)(A) (but reduced by amounts not included under subparagraph (B) or (C) of section 951(a)(1) because of the exclusions in paragraphs (2) and (3) of subsection (a) of this section), and (3) then to other earnings and profits. References in this subsection to section 951(a)(1)(C) and subsection (a)(3) shall be treated as references to such provisions as in effect on the day before the date of the enactment of the Small Business Job Protection Act of 1996.
# (d) Distributions excluded from gross income not to be treated as dividends
Any distribution excluded from gross income under subsection (a) shall be treated, for purposes of this chapter, as a distribution which is not a dividend; except that such distributions shall immediately reduce earnings and profits.
# (e) Coordination with amounts previously taxed under section 1248
For purposes of this section and section 960(c), any amount included in the gross income of any person as a dividend by reason of subsection (a) or (f) of section 1248 shall be treated as an amount included in the gross income of such person (or, in any case to which section 1248(e) applies, of the domestic corporation referred to in section 1248(e)(2)) under section 951(a)(1)(A).
# (f) Allocation rules for certain inclusions
(1) In general For purposes of this section, amounts that would be included under subparagraph (B) of section 951(a)(1) (determined without regard to this section) shall be treated as attributable first to earnings described in subsection (c)(2), and then to earnings described in subsection (c)(3). (2) Treatment of distributions In applying this section, actual distributions shall be taken into account before amounts that would be included under section 951(a)(1)(B) (determined without regard to this section).
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Cited by 85
- 26 CFR § 1.1248-2 — Earnings and profits attributable to a block of stock in simple cases.
- 26 CFR § 1.1248-3 — Earnings and profits attributable to stock in complex cases.
- 26 CFR § 1.1248-4 — Limitation on tax applicable to individuals.
- 26 CFR § 1.1291-0 — Treatment of shareholders of certain passive foreign investment companies; table of contents.
- 26 CFR § 1.1291-9 — Deemed dividend election.
- 26 CFR § 1.1297-0 — Table of contents.
- 26 CFR § 1.1297-3 — Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a section 1297(e) PFIC.
- 26 CFR § 1.1298-0 — Passive foreign investment company—table of contents.
- 26 CFR § 1.1298-3 — Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a former PFIC.
- 26 CFR § 1.1411-10 — Controlled foreign corporations and passive foreign investment companies.
- 26 CFR § 1.1502-32 — Investment adjustments.
- 26 CFR § 1.1502-80 — Applicability of other provisions of law.
Show 48 more
- 26 CFR § 1.245A(d)-1 — Disallowance of foreign tax credit or deduction.
- 26 CFR § 1.245A(e)-1 — Special rules for hybrid dividends.
- 26 CFR § 1.245A-10 — Examples.
- 26 CFR § 1.245A-5 — Limitation of section 245A deduction and section 954(c)(6) exception.
- 26 CFR § 1.245A-7 — Coordination rules for simple cases.
- 26 CFR § 1.245A-8 — Coordination rules for complex cases.
- 26 CFR § 1.367(b)-10 — Acquisition of parent stock or securities for property in triangular reorganizations.
- 26 CFR § 1.367(b)-2 — Definitions and special rules.
- 26 CFR § 1.367(b)-3 — Repatriation of foreign corporate assets in certain nonrecognition transactions.
- 26 CFR § 1.367(b)-7 — Carryover of earnings and profits and foreign income taxes in certain foreign-to-foreign nonrecognition transactions.
- 26 CFR § 1.562-1 — Dividends for which the dividends paid deduction is allowable.
- 26 CFR § 1.6038-2 — Information returns required of United States persons with respect to annual accounting periods of certain foreign corporations.
- 26 CFR § 1.851-2 — Limitations.
- 26 CFR § 1.861-12 — Characterization rules and adjustments for certain assets.
- 26 CFR § 1.861-20 — Allocation and apportionment of foreign income taxes.
- 26 CFR § 1.861-8 — Computation of taxable income from sources within the United States and from other sources and activities.
- 26 CFR § 1.865-2 — Loss with respect to stock.
- 26 CFR § 1.902-1 — Credit for domestic corporate shareholder of a foreign corporation for foreign income taxes paid by the foreign corporation.
- 26 CFR § 1.904-4 — Separate application of section 904 with respect to certain categories of income.
- 26 CFR § 1.904-5 — Look-through rules as applied to controlled foreign corporations and other entities.
- 26 CFR § 1.904-6 — Allocation and apportionment of foreign income taxes.
- 26 CFR § 1.904-7 — Transition rules.
- 26 CFR § 1.905-3 — Adjustments to U.S. tax liability and to current earnings and profits as a result of a foreign tax redetermination.
- 26 CFR § 1.907(c)-2 — Section 907(c)(3) items (for taxable years beginning after December 31, 1982).
- 26 CFR § 1.907(c)-3 — FOGEI and FORI taxes (for taxable years beginning after December 31, 1982).
- 26 CFR § 1.909-6 — Pre-2011 foreign tax credit splitting events.
- 26 CFR § 1.921-1T — Temporary regulations providing transition rules for DISCs and FSCs.
- 26 CFR § 1.951-1 — Amounts included in gross income of United States shareholders.
- 26 CFR § 1.951-3 — Coordination of subpart F with foreign personal holding company provisions.
- 26 CFR § 1.952-1 — Subpart F income defined.
- 26 CFR § 1.954-2 — Foreign personal holding company income.
- 26 CFR § 1.954-6 — Foreign base company shipping income.
- 26 CFR § 1.955-1 — Shareholder's pro rata share of amount of previously excluded subpart F income withdrawn from investment in less developed countries.
- 26 CFR § 1.955A-1 — Shareholder's pro rata share of amount of previously excluded subpart F income withdrawn from investment in foreign base company shipping operations.
- 26 CFR § 1.956-1 — Shareholder's pro rata share of the average of the amounts of United States property held by a controlled foreign corporation.
- 26 CFR § 1.956-2 — Definition of United States property.
- 26 CFR § 1.959-1 — Exclusion from gross income of United States persons of previously taxed earnings and profits.
- 26 CFR § 1.959-2 — Exclusion from gross income of controlled foreign corporations of previously taxed earnings and profits.
- 26 CFR § 1.959-3 — Allocation of distributions to earnings and profits of foreign corporations.
- 26 CFR § 1.959-4 — Distributions to United States persons not counting as dividends.
- 26 CFR § 1.960-1 — Overview, definitions, and computational rules for determining foreign income taxes deemed paid under section 960(a), (b), and (d).
- 26 CFR § 1.960-3 — Foreign income taxes deemed paid under section 960(b).
- 26 CFR § 1.960-4 — Additional foreign tax credit in year of receipt of previously taxed earnings and profits.
- 26 CFR § 1.960-5 — Credit for taxable year of inclusion binding for taxable year of exclusion.
- 26 CFR § 1.960-6 — Overpayments resulting from increase in limitation for taxable year of exclusion.
- 26 CFR § 1.961-2 — Reduction in basis of stock in foreign corporations and of other property.
- 26 CFR § 1.962-3 — Treatment of actual distributions.
- 26 CFR § 1.963-3 — Distributions counting toward a minimum distribution.
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