Hi there. Kindly assist on how to compute this part of IRC 965 Transition Tax Statement please.
LINE 3: TOTAL DEDUCTION UNDER SECTION 965(A)
PTO does not compute it automatically so if someone can give an illustration or a sample computation, it would be much appreciated.
Yes, we are prepping F5471 as well so that we had the following:
Total amount required to be included in income by reason of section 965(a) = $228,620
Aggregate foreign cash position, if applicable = $406,494
But we are not sure how to calculate this line based on the following rule:
Total deduction under section 965(c) = ?
"A U.S. shareholder of a DFIC is allowed a deduction for the tax year in which the above rules apply in an amount equal to the sum of: (i) the U.S. shareholder’s 8% rate equivalent percentage of the excess (if any) of: (a) the amount so included as gross income, over (b) the amount of the U.S. shareholder’s aggregate foreign cash position, plus (ii) the U.S. shareholder’s 15.5% rate equivalent percentage of so much of the amount described in item (i)(b) (above) as does not exceed the amount described in item (i)(a) (above). (Code Sec. 965(c)(1))"