Topic 8: Anti-Avoidance Rules: Subpart F

Question 1

§956(b)(1) defines “applicable earnings” as

Answer 1

the sum of current and accumulated earnings and profits, taking into account various adjustments and exclusions.

Question 2

§956(c)defines “United States property,

Answer 2

including tangible property located in the US, stock of US corporations, obligations of US persons, and certain other investments.

Question 3

§956(a)(1) sets the amount of the §956 inclusion as the

Answer 3

lesser of the shareholder’s pro rata share of the CFC’s earnings invested in US property, or the shareholder’s pro rata share of applicable

Question 4

§956(a)(2) reduces the inclusion amount by amounts

Answer 4

previously included under §956.