Look-thru applies to dividends from noncontrolled 10-percent owned foreign corporations
(A) In general
(A)In general#
For purposes of this subsection, any dividend from a noncontrolled 10-percent owned foreign corporation with respect to the taxpayer shall be treated as income described in a subparagraph of paragraph (1) in proportion to the ratio of—
(i) the portion of earnings and profits attributable to income described in such subparagraph, to
(ii) the total amount of earnings and profits.
(A)(i)#
the portion of earnings and profits attributable to income described in such subparagraph, to
(A)(ii)#
the total amount of earnings and profits.
(B)Earnings and profits of controlled foreign corporations#
In the case of any distribution from a controlled foreign corporation to a United States shareholder, rules similar to the rules of subparagraph (A) shall apply in determining the extent to which earnings and profits of the controlled foreign corporation which are attributable to dividends received from a noncontrolled 10-percent owned foreign corporation may be treated as income in a separate category.
(C)Special rules#
For purposes of this paragraph—
(i) Earnings and profits (I) In general The rules of section 316 shall apply. (II) Regulations The Secretary may prescribe regulations regarding the treatment of distributions out of earnings and profits for periods before the taxpayer’s acquisition of the stock to which the distributions relate.
(ii) Inadequate substantiation If the Secretary determines that the proper subparagraph of paragraph (1) in which a dividend is described has not been substantiated, such dividend shall be treated as income described in paragraph (1)(C).
(iii) Coordination with high-taxed income provisions Rules similar to the rules of paragraph (3)(F) shall apply for purposes of this paragraph.
(iv) Look-thru with respect to carryover of credit Rules similar to subparagraph (A) also shall apply to any carryforward under subsection (c) from a taxable year beginning before January 1, 2003 , of tax allocable to a dividend from a noncontrolled 10-percent owned foreign corporation with respect to the taxpayer. The Secretary may by regulations provide for the allocation of any carryback of tax allocable to a dividend from a noncontrolled 10-percent owned foreign corporation from a taxable year beginning on or after January 1, 2003 , to a taxable year beginning before such date for purposes of allocating such dividend among the separate categories in effect for the taxable year to which carried.
(C)(i)Earnings and profits#
(I) In general The rules of section 316 shall apply.
(II) Regulations The Secretary may prescribe regulations regarding the treatment of distributions out of earnings and profits for periods before the taxpayer’s acquisition of the stock to which the distributions relate.