CFC buyer's sec. 338 election deprives seller of FTCs.
The Tax Adviser › Vol. 32 Nbr. 7, July 2001
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Summary
Controlled foreign corporations; foreign tax credits
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Extract
CFC buyer's sec. 338 election deprives seller of FTCs.
When a U.S. person sells stock in a controlled foreign corporation (CFC) and recognizes gain, Sec. 1248 may apply to treat all or a portion of the gain as dividend income, to the extent of the shareholder's proportionate share of the CFC's historical earnings. If the seller is a U.S. corporation, it might be able to claim foreign tax credits (FTCs) under Sec. 902 for the deemed dividend. The amount of FTCs av...
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