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November 20, 2020

IRS issues final regulations to reduce possibility anti-abuse rules would result in double taxation during GILTI gap period

The IRS issued final regulations (TD 9934) under Sections 245A and 951A, coordinating two independent sets of anti-abuse rules that apply to extraordinary dispositions and disqualified transfers. Both rules apply to certain transactions of a controlled foreign corporation occurring during the so-called Global Intangible Low-Taxed Income (GILTI) gap period. The final regulations are effective January 12, 2021. (See Tax Alert 2020-2157 for details on the proposed regulations.)