# Prop. Treas. Reg. § 1.904-5: Look-through rules as applied to controlled foreign  corporations and other entities.

Proposed regulation, not in force. REG-104537-97, 64 FR 37727, published 1999-07-13 <https://www.federalregister.gov/documents/1999/07/13/99-17367/withdrawal-of-guidance-under-subpart-f-relating-to-partnerships-and-branches-and-issuance-of-new>. Interprets 26 U.S.C. § 904.

Par. 2. In Sec. 1.904-5, paragraph (k)(1) is revised to read as follows:

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(k) Ordering rules--(1) In general. Income received or accrued by a related person to which the look-through rules apply is characterized before amounts included from, or paid or distributed by, that person and received or accrued by a related person. For purposes of determining the character of income received or accrued by a person from a related person if the payor or another related person also receives or accrues income from the recipient and the look-through rules apply to the income in all cases, the rules of paragraph (k)(2) of this section apply. Notwithstanding any other provision of this section, the principles of Sec. 1.954-1(c)(1)(i) will apply to any expense subject to Sec. 1.954-1(c)(1)(i).

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