Reg. § 1.909-1 Definitions and special rules.
(a) Definitions For purposes of section , this section, and through , the following definitions apply:
(1) The term section corporation means any foreign corporation with respect to which one or more domestic corporations meet the ownership requirements of section or (b).
(2) The term section shareholder means any domestic corporation that meets the ownership requirements of section or (b) with respect to a section corporation.
(3) The term payor means a person that pays or accrues a foreign income tax within the meaning of , and also includes a person that takes foreign income taxes paid or accrued by a partnership, S corporation, estate or trust into account pursuant to section , section or section .
(4) The term covered person means, with respect to a payor—
(i) Any entity in which the payor holds, directly or indirectly, at least a 10 percent ownership interest (determined by vote or value);
(ii) Any person that holds, directly or indirectly, at least a 10 percent ownership interest (determined by vote or value) in the payor; or
(iii) Any person that bears a relationship that is described in section or to the payor.
(5) The term foreign income tax means any income, war profits, or excess profits tax paid or accrued to any foreign country or to any possession of the United States. A foreign income tax includes any tax paid or accrued in lieu of such a tax within the meaning of section .
(6) The term post-1986 foreign income taxes has the meaning provided in .
(7) The term post-1986 undistributed earnings has the meaning provided in .
(8) The term disregarded entity means an entity that is disregarded as an entity separate from its owner, as provided in .
(9) The term hybrid partnership means a partnership that is subject to income tax in a foreign country as a corporation (or otherwise at the entity level) on the basis of residence, place of incorporation, place of management or similar criteria.
(b) Taxes paid or accrued by a partnership, S corporation or trust Under section , section applies at the partner level, and similar rules apply in the case of an S corporation or trust. Accordingly, in the case of foreign income taxes paid or accrued by a partnership, S corporation or trust, taxes allocated to one or more partners, shareholders or beneficiaries (as the case may be) will be treated as split taxes to the extent such taxes would be split taxes if the partner, shareholder or beneficiary had paid or accrued the taxes directly on the date such taxes are taken into account by the partner under sections and , by the shareholder under section , or by the beneficiary under section . Any such split taxes will be suspended in the hands of the partner, shareholder or beneficiary.
(c) Related income of a partnership, S corporation or trust For purposes of determining whether related income is taken into account by a covered person, related income of a partnership, S corporation or trust is considered to be taken into account by the partner, shareholder or beneficiary to whom the related income is allocated.
(d) Application of section 909 to pre-1987 accumulated profits and pre-1987 foreign income taxes Section and through will apply to pre-1987 accumulated profits (as defined in ) and pre-1987 foreign income taxes (as defined in ) of a section corporation attributable to taxable years beginning on or after January 1, 2012.
(e) Effective/applicability date This section applies to taxable years ending after February 9, 2015. See (revised as of April 1, 2014) for rules applicable to taxable years beginning on or after January 1, 2011, and ending on or before February 9, 2015.
[T.D. 9710, 80 FR 7328, Feb. 10, 2015]