§91 — Certain foreign branch losses transferred to specified 10-percent owned foreign corporations
24 cases·8 followed·16 cited—33% support
Statute Text — 26 U.S.C. §91
If a domestic corporation transfers substantially all of the assets of a foreign branch (within the meaning of section 367(a)(3)(C), as in effect before the date of the enactment of the Tax Cuts and Jobs Act) to a specified 10-percent owned foreign corporation (as defined in section 245A) with respect to which it is a United States shareholder after such transfer, such domestic corporation shall include in gross income for the taxable year which includes such transfer an amount equal to the transferred loss amount with respect to such transfer.
For purposes of this section, the term “transferred loss amount” means, with respect to any transfer of substantially all of the assets of a foreign branch, the excess (if any) of—
the sum of losses—
which were incurred by the foreign branch after
December 31, 2017
, and before the transfer, and
with respect to which a deduction was allowed to the taxpayer, over
the sum of—
any taxable income of such branch for a taxable year after the taxable year in which the loss was incurred and through the close of the taxable year of the transfer, and
any amount which is recognized under section 904(f)(3) on account of the transfer.
The transferred loss amount shall be reduced (but not below zero) by the amount of gain recognized by the taxpayer on account of the transfer (other than amounts taken into account under subsection (b)(2)(B)).
Amounts included in gross income under this section shall be treated as derived from sources within the United States.
Consistent with such regulations or other guidance as the Secretary shall prescribe, proper adjustments shall be made in the adjusted basis of the taxpayer’s stock in the specified 10-percent owned foreign corporation to which the transfer is made, and in the transferee’s adjusted basis in the property transferred, to reflect amounts included in gross income under this section.
24 Citing Cases
taxation; (2) whetherpursuant to section 911 she is entitled to a larger foreign earned income exclusion than respondent has allowed; and (3) whetherpursuantto section 901 she is entitled to any amount offoreign tax credit.
Section 91 1 In Arnett v. Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U .S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is no
Section 91 1 In Arnett v . Commissioner , 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is n
Section 91 1 In Arnett v . Commissioner , 126 T .C . 89, 91-96 (2006) (Arnett I), affd . 473 F .3d 790 (7th Cir . 2007) (Arnett II), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion that Antarctica is n
e corporation"); Koree v. Commissioner, 40 T.C. 961, 966 (1963) (holding that - 20 - [*20] payments in furtherance ofa venture calculated to enrich corporation are capital in nature); see also Gantner v. Commissioner, 905 F.2d 241 (8th Cir. 1990), § 91 T.C. 713 (1988) and 92 T.C. 192 (1988). Respondent acknowledges that a shareholder's payment ofcorporate expenses may be deemed a capital contribution in appropriate circumstances.¹5 However, respondent asserts that "[a]ny conclusion that a capita
at 598. But that Act also added a third requirement to the all-events test for accrual-method taxpayers generally-- economic performance would have to take place before a liability would be considered "incurred". See United States v. General Dynamics Corp., 481 U.S. 239, 243 n.3 (1987). That Act also added section 468 to the Code.
at 598. But that Act also added a third requirement to the all-events test for accrual-method taxpayers generally-- economic performance would have to take place before a liability would be considered "incurred". See United States v. General Dynamics Corp., 481 U.S. 239, 243 n.3 (1987). That Act also added section 468 to the Code.
91.409(2) (b),.in effect for the years in issue, required an aircraft to receive an additional annual inspection if it carried persons for hire or for flight instruction beyond 100 hours.- - 4 - In 2004 petitioner focused his time on the Northwest activities and did not have other employment. On his 2004 Federal income tax return, petitioner
,a point of origin nor a destination of a drug. shipment; it is 11 merely something through which amaircraft must pass on its way from one location to another ..") . It follows that internationakl airspace is not a "foreigncountry;" for purposes of section 91°1 .. 13Petitioners argue that "linking foreign earned income to geography fails upon closer scrutiny" because "It would not bed feasible to allocate earnings according to time spent over the~' , United States , a foreign country, land inte
Section 91 1 In Arnett v . Commissioner, 126 T .C . 89, 91-96 (2006) (Arnett I), affd. 473 F .3d 790 (7th Cir . 2007) (Arnett II ), we addressed the arguments made by the parties herein regarding section 911 . The U.S . Court of Appeals for the Seventh Circuit agreed with our analysis of section 911 and affirmed our conclusion tha t Antarctica is n