Internal Revenue Code · 26 U.S.C.
§ 245A. Deduction for foreign source-portion of dividends received by domestic corporations from specified 10-percent owned foreign corporations
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 245A
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- December 22, 2017 by Pub. L. 115–97
- Length
- 7 subsections · 769 words · about 3 min to read
- Defines
- 4 terms
- Cross-references
- cites 7; cited by 9 Code sections and 17 other regulations
- Regulations
- 9 issued under this section
In the case of any dividend received from a specified 10-percent owned foreign corporation by a domestic corporation which is a United States shareholder with respect to such foreign corporation, there shall be allowed as a deduction an amount equal to the foreign-source portion of such dividend.
The term “specified 10-percent owned foreign corporation” means any foreign corporation with respect to which any domestic corporation is a United States shareholder with respect to such corporation.
Such term shall not include any corporation which is a passive foreign investment company (as defined in section 1297) with respect to the shareholder and which is not a controlled foreign corporation.
No credit shall be allowed under section 901 for any taxes paid or accrued (or treated as paid or accrued) with respect to any dividend for which a deduction is allowed under this section.
No deduction shall be allowed under this chapter for any tax for which credit is not allowable under section 901 by reason of paragraph (1) (determined by treating the taxpayer as having elected the benefits of subpart A of part III of subchapter N).
Any amount which is treated as a dividend under section 1291(d)(2)(B) shall not be treated as a dividend for purposes of this section.
The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the provisions of this section, including regulations for the treatment of United States shareholders owning stock of a specified 10 percent 11 So in original. Probably should be “10-percent”. owned foreign corporation through a partnership.
(Added Pub. L. 115–97, title I, § 14101(a), Dec. 22, 2017, 131 Stat. 2189.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Regulations under this section
Treasury regulations (26 CFR) issued under § 245A
- § 1.245A-5 Limitation of section 245A deduction and section 954(c)(6) exception.
- § 1.245A-6 Coordination of extraordinary disposition and disqualified basis rules.
- § 1.245A-7 Coordination rules for simple cases.
- § 1.245A-8 Coordination rules for complex cases.
- § 1.245A-9 Other rules and definitions.
- § 1.245A-10 Examples.
- § 1.245A-11 Applicability dates.
- § 1.245A(d)-1 Disallowance of foreign tax credit or deduction.
- § 1.245A(e)-1 Special rules for hybrid dividends.
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 7 other sections
- § 1297 Passive foreign investment company
- § 964(a) Miscellaneous provisions
- § 986 Determination of foreign taxes and foreign corporation’s earnings and profits
- § 245(a)(5) Dividends received from certain foreign corporations
- § 901 Taxes of foreign countries and of possessions of United States
- § 951(a)(1)(A) Amounts included in gross income of United States shareholders
- § 1291(d)(2)(B) Interest on tax deferral
Cited by 9 Code sections
- § 78 Gross up for deemed paid foreign tax credit
- § 91(a) Certain foreign branch losses transferred to specified 10-percent owned foreign corporations
- § 163(j)(8)(A)(vi) Interest
- § 246(c)(5)(A) Rules applying to deductions for dividends received
- § 904(b)(4) Limitation on credit
- § 909(b) Suspension of taxes and credits until related income taken into account
- § 961(d) Adjustments to basis of stock in controlled foreign corporations and of other property
- § 964(e)(4)(A)(iii) Miscellaneous provisions
- § 1248(j) Gain from certain sales or exchanges of stock in certain foreign corporations
Cited in 17 regulations not issued under it
- § 1.163(j)-7 Application of the section 163(j) limitation to foreign corporations and United States shareholders.
- § 1.267A-2 Hybrid and branch arrangements.
- § 1.367(b)-10 Acquisition of parent stock or securities for property in triangular reorganizations.
- § 1.861-8 Computation of taxable income from sources within the United States and from other sources and activities.
- § 1.861-12 Characterization rules and adjustments for certain assets.
- § 1.861-13 Special rules for characterization of controlled foreign corporation stock.
- § 1.861-20 Allocation and apportionment of foreign income taxes.
- § 1.901-1 Allowance of credit for foreign income taxes.
- § 1.901-2 Income, war profits, or excess profits tax paid or accrued.
- § 1.904-4 Separate application of section 904 with respect to certain categories of income.
- § 1.904(b)-3 Disregard of certain dividends and deductions under section 904(b)(4).
- § 1.956-1 Shareholder's pro rata share of the average of the amounts of United States property held by a controlled foreign corporation.
- § 1.960-1 Overview, definitions, and computational rules for determining foreign income taxes deemed paid under section 960(a), (b), and (d).
- § 1.960-3 Foreign income taxes deemed paid under section 960(b).
- § 1.965-4 Disregard of certain transactions.
- § 1.986(a)-1 Translation of foreign income taxes for purposes of the foreign tax credit.
- § 1.6038-2 Information returns required of United States persons with respect to annual accounting periods of certain foreign corporations.
Amendment history
From the source credit and the official notes, newest first.
- Added by Pub. L. 115–97
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter B Computation of Taxable Income
- Part VIII SPECIAL DEDUCTIONS FOR CORPORATIONS
Nearby sections
- § 242 Repealed
- § 243 Dividends received by corporations
- § 244 Repealed
- § 245 Dividends received from certain foreign corporations
- § 245A Deduction for foreign source-portion of dividends received by domestic corporations from specified 10-percent owned foreign corporations
- § 246 Rules applying to deductions for dividends received
- § 246A Dividends received deduction reduced where portfolio stock is debt financed
- § 247 Contributions to Alaska Native Settlement Trusts
- § 248 Organizational expenditures
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Statutory Notes and Related Subsidiaries
Effective Date
Pub. L. 115–97, title I, § 14101(f), Dec. 22, 2017, 131 Stat. 2192, provided that: “The amendments made by this section [enacting this section and amending sections 246, 904, 951, 957, and 1059 of this title] shall apply to distributions made after (and, in the case of the amendments made by subsection (d) [amending section 904 of this title], deductions with respect to taxable years ending after) December 31, 2017.”