The US IRS on July 24 published final regulations, TD 9871 on the allocation by a partnership of foreign income taxes.
The regulations concern a safe harbor rule that determines whether allocations of creditable foreign tax expenditures are deemed to be in accordance with the partners’ interests in the partnership.
Proposed and temporary regulations were issued on the topic on February 4, 2016. The guidance received one public comment. Minor changes were made in the final version to fix the unintentional deletion of certain paragraphs in the temporary regs.
The regulations affect partnerships that pay or accrue foreign income taxes and partners in such partnerships.
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