The U.S. IRS has published an updated practice unit, Foreign Tax Credit - Categorization of Income and Taxes Into Proper Basket. The general overview of the practice unit includes the following:
Note: This Practice Unit updates the May 15, 2023, Practice Unit with the same title. The update clarifies slide 5 regarding IRC 962 election and that the reduced corporate rate of 21% is before the IRC 250 deduction.
The Foreign Tax Credit (FTC) calculation must be applied separately to each cat…