The IRS has issued final regulations on a partnership’s allocations of creditable foreign tax expenditures.
July 29, 2019
The finalized regulations address the operation of the safe harbor rule used in determining whether allocations of partnership creditable foreign tax expenditures (CFTEs) to partners are deemed to be in accordance with the partners’ interests in a partnership.
Under the safe harbor, a partnership must determine the partnership’s CFTE categories, determine the partnership’s net income in each CFTE category and allocate the partnership’s CFTEs to each category. The final regs apply to partnership tax years beginning on or after Oct. 19, 2006.