This article responds to the notice of proposed rulemaking under sections 861 and 904 (REG105495-19) published in the Federal Register December 17, 2019 (the proposed regulations). The proposed regulations would not allocate U.S. shareholder deductions for research and development or experimentation (R&D or R&E) expenditures under section 174 (R&D deductions) to a gross income inclusion under section 951 (subpart F inclusion) or section 951A (global intangible low-taxed income)1 from a controlled foreign corporation for foreign tax credit limitation purposes.
Shay, Stephen E. "Why R&D Should be Allocated to Subpart F and GILTI." Reuven S. Avi-Yonah, Patrick Driessen, J. Clifton Fleming Jr., and Robert J. Peroni, co-authors. Tax Notes Int'l. (2020): 1365-83.
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