New IRS procedure eases FTC computations

✍ Scribed by Shirley Dennis-Escoffier

• Book ID: 102296570
• Publisher: John Wiley and Sons
• Year: 2005
• Tongue: English
• Weight: 39 KB
• Volume: 16
• Category: Article
• ISSN: 1044-8136
• DOI: 10.1002/jcaf.20157

✦ Synopsis

The IRS recently issued a new revenue procedure making it easier for taxpayers to adopt a simpler method of allocating interest expense between domestic and foreign source income when computing the foreign tax credit (FTC). With Revenue Procedure 2005-28, the IRS provides taxpayers automatic consent to elect an alternative tax book value method that reduces the basis disparity between domestic and foreign assets used when allocating interest expense. Electing this method may result in a higher foreign tax credit.