Internal Revenue Code · 26 U.S.C.
§ 907. Special rules in case of foreign oil and gas income
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. § 907
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- March 29, 1975 by Pub. L. 94–12
- Last amended
- March 23, 2018 by Pub. L. 115–141
- Amendments
- 12 dated changes in the source credit
- Length
- 6 subsections · 2,174 words · about 9 min to read
- Defines
- 7 terms
- Cross-references
- cites 5; cited by 6 Code sections and 21 other regulations
- Regulations
- 9 issued under this section
For purposes of clause (i), the net operating loss deduction allowable for the taxable year under section 172(a) shall not be taken into account.
For purposes of subparagraph (B)(ii)(I), foreign oil extraction losses shall be determined under this paragraph as in effect on the day before the date of the enactment of the Energy Improvement and Extension Act of 2008.
The term “oil and gas extraction taxes” means any income, war profits, and excess profits tax paid or accrued (or deemed to have been paid under section 960) during the taxable year with respect to foreign oil and gas extraction income (determined without regard to paragraph (4)) or loss which would be taken into account for purposes of section 901 without regard to this section.
For purposes of this chapter, in determining the amount of taxable income in the case of foreign oil and gas extraction income, if the oil or gas is disposed of, or is acquired other than from the government of a foreign country, at a posted price (or other pricing arrangement) which differs from the fair market value for such oil or gas, such fair market value shall be used in lieu of such posted price (or other pricing arrangement).
If the amount of the foreign oil and gas taxes paid or accrued during any taxable year exceeds the limitation provided by subsection (a) for such taxable year (hereinafter in this subsection referred to as the “unused credit year”), such excess shall be deemed to be foreign oil and gas taxes paid or accrued in the first preceding taxable year and in any of the first 10 succeeding taxable years, in that order and to the extent not deemed tax paid or accrued in a prior taxable year by reason of the limitation imposed by paragraph (2). Such amount deemed paid or accrued in any taxable year may be availed of only as a tax credit and not as a deduction and only if the taxpayer for such year chooses to have the benefits of this subpart as to taxes paid or accrued for that year to foreign countries or possessions.
In the case of any unused credit year beginning before January 1, 2009, this subsection, as in effect on the day before the date of the enactment of the Energy Improvement and Extension Act of 2008, shall apply to unused oil and gas extraction taxes carried from such unused credit year to a taxable year beginning after December 31, 2008.
In the case of any unused credit year beginning in 2009, the amendments made to this subsection by the Energy Improvement and Extension Act of 2008 shall be treated as being in effect for any preceding year beginning before January 1, 2009, solely for purposes of determining how much of the unused foreign oil and gas taxes for such unused credit year may be deemed paid or accrued in such preceding year.
(Added Pub. L. 94–12, title VI, § 601(a), Mar. 29, 1975, 89 Stat. 54; amended Pub. L. 94–455, title X, §§ 1031(b)(6), 1032(b), 1035(a), (b), (d)(1), (2), 1052(c)(4), Oct. 4, 1976, 90 Stat. 1623, 1626, 1630–1632, 1648; Pub. L. 95–600, title III, § 301(b)(14), title VII, § 701(u)(8)(A), (B), Nov. 6, 1978, 92 Stat. 2822, 2916; Pub. L. 97–248, title II, § 211(a)–(c)(1), (d), Sept. 3, 1982, 96 Stat. 448–450; Pub. L. 100–647, title I, § 1012(g)(6), Nov. 10, 1988, 102 Stat. 3501; Pub. L. 101–508, title XI, § 11801(a)(32), Nov. 5, 1990, 104 Stat. 1388–521; Pub. L. 103–66, title XIII, § 13235(a)(1), Aug. 10, 1993, 107 Stat. 504; Pub. L. 104–188, title I, § 1704(t)(36), Aug. 20, 1996, 110 Stat. 1889; Pub. L. 108–357, title IV, § 417(b), Oct. 22, 2004, 118 Stat. 1512; Pub. L. 110–343, div. B, title IV, § 402(a)–(c), Oct. 3, 2008, 122 Stat. 3852, 3854; Pub. L. 113–295, div. A, title II, § 210(e), Dec. 19, 2014, 128 Stat. 4031; Pub. L. 115–97, title I, § 14301(c)(24)–(27), Dec. 22, 2017, 131 Stat. 2223, 2224; Pub. L. 115–141, div. U, title IV, § 401(a)(158), (159), Mar. 23, 2018, 132 Stat. 1191.)
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 § 907
- § 1.907-0 Outline of regulation provisions for section 907.
- § 1.907(a)-0 Introduction (for taxable years beginning after December 31, 1982).
- § 1.907(a)-1 Reduction in taxes paid on FOGEI (for taxable years beginning after December 31, 1982).
- § 1.907(b)-1 Reduction of creditable FORI taxes (for taxable years beginning after December 31, 1982).
- § 1.907(c)-1 Definitions relating to FOGEI and FORI (for taxable years beginning after December 31, 1982).
- § 1.907(c)-2 Section 907(c)(3) items (for taxable years beginning after December 31, 1982).
- § 1.907(c)-3 FOGEI and FORI taxes (for taxable years beginning after December 31, 1982).
- § 1.907(d)-1 Disregard of posted prices for purposes of chapter 1 of the Code (for taxable years beginning after December 31, 1982).
- § 1.907(f)-1 Carryback and carryover of credits disallowed by section 907(a) (for amounts carried between taxable years that each begin after December 31, 1982).
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 5 other sections
- § 901 Taxes of foreign countries and of possessions of United States
- § 11(b) Tax imposed
- § 960 Deemed paid credit for subpart F inclusions
- § 904(d)(2)(A) Limitation on credit
- § 172(a) Net operating loss deduction
Cited by 6 Code sections
- § 245(a)(10)(C) Dividends received from certain foreign corporations
- § 250(b)(3)(B) Foreign-derived deduction eligible income and net CFC tested income
- § 865(h)(1)(B) Source rules for personal property sales
- § 904(d)(6)(A)(iii) Limitation on credit
- § 951A(b)(2)(A)(i)(V) Net CFC tested income included in gross income of United States shareholders
- § 6501(i) Limitations on assessment and collection
Cited in 21 regulations not issued under it
- § 1.78-1 Gross up for deemed paid foreign tax credit.
- § 1.245A(d)-1 Disallowance of foreign tax credit or deduction.
- § 1.250(b)-1 Computation of foreign-derived intangible income (FDII).
- § 1.367(a)-6T Transfer of foreign branch with previously deducted losses (temporary).
- § 1.861-8 Computation of taxable income from sources within the United States and from other sources and activities.
- § 1.861-8T Computation of taxable income from sources within the United States and from other sources and activities (temporary).
- § 1.861-11 Special rules for allocating and apportioning interest expense of an affiliated group of corporations.
- § 1.861-14T Special rules for allocating and apportioning certain expenses (other than interest expense) of an affiliated group of corporations (temporary).
- § 1.902-1 Credit for domestic corporate shareholder of a foreign corporation for foreign income taxes paid by the foreign corporation.
- § 1.902-3 Credit for domestic corporate shareholder of a foreign corporation for foreign income taxes paid with respect to accumulated profits of taxable years of the foreign corporation beginning before January 1, 1987.
- § 1.904-2 Carryback and carryover of unused foreign tax.
- § 1.904-3 Carryback and carryover of unused foreign tax by spouses making a joint return.
- § 1.904-4 Separate application of section 904 with respect to certain categories of income.
- § 1.904(f)-1 Overall foreign loss and the overall foreign loss account.
- § 1.904(f)-2 Recapture of overall foreign losses.
- § 1.904(f)-6 Transitional rule for recapture of FORI and general limitation overall foreign losses incurred in taxable years beginning before January 1, 1983, from foreign source taxable income subject to the general limitation in taxable years beginning after December 31, 1982.
- § 1.904(f)-7 Separate limitation loss and the separate limitation loss account.
- § 1.951A-2 Tested income and tested loss.
- § 1.954-8 Foreign base company oil related income.
- § 1.960-1 Overview, definitions, and computational rules for determining foreign income taxes deemed paid under section 960(a), (b), and (d).
- § 1.964-4 Verification of certain classes of income.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 115–141Parts changed in 2018: (c)(3)(C) (f)(1)
- Amended by Pub. L. 115–97Parts changed in 2017: (b)(2)(B) (c)(3)(A) (c)(3)(B) (c)(5) (f)(2)(B)(i)
- Amended by Pub. L. 113–295Parts changed in 2014: (f)(4)(A)
- Amended by Pub. L. 110–343Parts changed in 2008: (a) (c)(4) (f) (f)(4)
- Amended by Pub. L. 108–357Parts changed in 2004: (f)(1)
- Amended by Pub. L. 104–188Parts changed in 1996: (c)(4)(B)(iii)(I)
- Amended by Pub. L. 103–66Parts changed in 1993: (c)(1)
- Amended by Pub. L. 101–508Parts changed in 1990: (e) (f)(3)(C)
- Amended by Pub. L. 100–647Parts changed in 1988: (c)(3) (c)(3)(B)
- Amended by Pub. L. 97–248Parts changed in 1982: (b) (c)(2) (c)(4) (e) (f)(1) (f)(2)(B) (f)(3)(A) (f)(3)(B)
- Amended by Pub. L. 95–600Parts changed in 1978: (a)(2) (b)
- Amended by Pub. L. 94–455Parts changed in 1976: (a) (b) (c)(5) (e)(1) (e)(2) (f) (g)
- Added by Pub. L. 94–12
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter N Tax Based on Income From Sources Within or Without the United States
- Part III INCOME FROM SOURCES WITHOUT THE UNITED STATES
- Subpart A Foreign Tax Credit
Nearby sections
- § 903 Credit for taxes in lieu of income, etc., taxes
- § 904 Limitation on credit
- § 905 Applicable rules
- § 906 Nonresident alien individuals and foreign corporations
- § 907 Special rules in case of foreign oil and gas income
- § 908 Reduction of credit for participation in or cooperation with an international boycott
- § 909 Suspension of taxes and credits until related income taken into account
Official notes
The Law Revision Counsel's notes for this section (amendments, effective dates and related laws) are long, so they have their own page.