Ruling 2005-02: IRC Sec. 965, apportionable business income.

• Position: FTB News - Internal Revenue Code - Brief Article

The American Jobs Creation Act of 2004 enacted IRC Sec. 965, which provides U.S. companies with a temporary incentive to repatriate any earnings held by foreign subsidiaries. However, a requirement under Sec. 965 that dividends be used in certain types of investments may affect the characterization of any possible income earned on the dividends, pending their use in a qualified investment under Sec. 965.

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When is income that is earned on IRC Sec. 965 cash dividends, pending the domestic reinvestment of those cash...