Par. 22. Sections 1.959-5 through 1.959-12 are added to read as follows:
(a) Scope. This section sets forth applicability dates for the section 959 regulations. Paragraph (b) of this section provides the general applicability dates. Paragraph (c) of this section provides interim application for certain provisions. Paragraph (d) of this section allows early application.
(b) In general. Sections 1.959-1 through 1.959-7 and 1.959-10 and 1.959-11 apply to taxable years of foreign corporations beginning on or after [date of publication of final regulations in the Federal Register ] and to taxable years of persons for which such taxable years of those foreign corporations are relevant.
(c) Interim application of 2019 notice provisions —(1) In general. For taxable years of United States shareholders (and successors in interest) ending after December 14, 2018, and to which §§ 1.959-1 through 1.959-7 and 1.959-10 and 1.959-11 do not apply pursuant to paragraph (b) or (d) of this section, and taxable years of foreign corporations ending with or within such taxable years, the 2019 notice provisions (defined in paragraph (c)(2) of this section) and § 1.959-11 apply.
(2) 2019 notice provisions. The 2019 notice provisions means §§ 1.959-1(c) (treatment of an S corporation), 1.959-2 (accounting of previously taxed earnings and profits), 1.959-3 (adjustments to shareholder-level accounts and, consequently, foreign corporation-level accounts), 1.959-4(e) and 1.959-5(d) (allocation of distributions and section 956 amounts), and the relevant definitions in § 1.959-1(b), along with treating previously taxed earnings and profits as distributed under section 959 only to the extent that the distribution is a dividend (as defined in section 316), determined without regard to section 959(d). For purposes of applying the 2019 notice provisions, the PTEP groups listed in the following table may be used in lieu of the PTEP groups listed in § 1.959-2, the portions of §§ 1.959-2 and 1.959-3 relating to PTEP tax pools, corporate PTEP tax pools, adjusted applicable percentages, and section 965(c) deduction percentages do not apply, and the portions of §§ 1.959-3 through 1.959-5 and 1.959-7 relating to the timing of adjustments and determinations do not apply.
| Section 959(c)(1) PTEP groups | Group | Description | Section 959(c)(2) PTEP groups | Group | Description |
|---|---|---|---|---|---|
| Reclassified section 965(a) PTEP group | Earnings and profits described in section 959(c)(1)(A) that were initially described in section 959(c)(2) by reason of section 965(a) | Section 965(a) PTEP group | Earnings and profits described in section 959(c)(2) by reason of section 965(a). | ||
| Reclassified section 965(b) PTEP group | Earnings and profits described in section 959(c)(1)(A) that were initially described in section 959(c)(2) by reason of section 965(b)(4)(A) | Section 965(b) PTEP group | Earnings and profits described in section 959(c)(2) by reason of section 965(b)(4)(A). | ||
| Section 951(a)(1)(B) PTEP group | Earnings and profits described in section 959(c)(1)(A) by reason of section 951(a)(1)(B) and not by reason of section 959(a)(2) | ||||
| Reclassified section 951A PTEP group | Earnings and profits described in section 959(c)(1)(A) that were initially described in section 959(c)(2) by reason of section 951A(f)(2) | Section 951A PTEP group | Earnings and profits described in section 959(c)(2) by reason of section 951A(f)(2). | ||
| Reclassified section 245A(e)(2) PTEP group | Earnings and profits described in section 959(c)(1)(A) that were initially described in section 959(c)(2) by reason of section 245A(e)(2) | Section 245A(e)(2) PTEP group | Earnings and profits described in section 959(c)(2) by reason of section 245A(e)(2). | ||
| Reclassified section 959(e) PTEP group | Earnings and profits described in section 959(c)(1)(A) that were initially described in section 959(c)(2) by reason of section 959(e) | Section 959(e) PTEP group | Earnings and profits described in section 959(c)(2) by reason of section 959(e). | ||
| Reclassified section 964(e)(4) PTEP group | Earnings and profits described in section 959(c)(1)(A) that were initially described in section 959(c)(2) by reason of section 964(e)(4) | Section 964(e) PTEP group | Earnings and profits described in section 959(c)(2) by reason of section 964(e)(4). | ||
| Reclassified section 951(a)(1)(A) PTEP group | Earnings and profits described in section 959(c)(1)(A) that were initially described in section 959(c)(2) by reason of section 951(a)(1)(A) and not described in another PTEP group | Section 951(a)(1)(A) PTEP group | Earnings and profits described in section 959(c)(2) by reason of section 951(a)(1)(A) and not described in another PTEP group. | ||
| Section 956A PTEP group | Earnings and profits described in section 959(c)(1)(B), including by reason of section 959(a)(3) (before its repeal) |
(d) Early application —(1) In general. Sections 1.959-1 through 1.959-7 and 1.959-10 and 1.959-11 may be applied to a taxable year of a foreign corporation not described in paragraph (b) of this section, and then must be applied to all succeeding taxable years of the foreign corporation not described in paragraph (b) of this section, if the conditions described in paragraphs (d)(2) through (4) of this section are satisfied. The foreign corporation described in the preceding sentence is the early application corporation and any taxable years to which the early application corporation applies §§ 1.959-1 through 1.959-7, 1.959-10, and 1.959-11 pursuant to the preceding sentence are the early application years.
(2) Consistent application condition —(i) In general. The provisions described in paragraph (d)(2)(ii) of this section are applied in their entirety to the early application years and all taxable years of covered shareholders for which the early application years are relevant. In addition, §§ 1.959-1 through 1.959-7, 1.959-10, and 1.959-11 are applied in their entirety pursuant to paragraph (d) of this section to all taxable years that both are of foreign corporations that are related to the early application corporation and end on or after the later of the last day of the first early application year and the first day on which the foreign corporations are related to the early application corporation. For purposes of the preceding sentence, foreign corporations are related if the foreign corporations bear a relationship to each other described in section 267(b).
(ii) Provisions. The provisions described in this paragraph (d)(2)(ii) are §§ 1.163(j)-7(g)(2)(ii), 1.245A(d)-1(d), 1.312-6(f), 1.312-8(c), 1.861-20, 1.904-6(e), 1.905-3, 1.905-4(c)(6), 1.951-1, 1.951-2, 1.951A-1(d), 1.951A-2(c)(1)(vi), 1.952-1(c)(4), 1.954-1(c)(1)(iii)(C), 1.959-1 through 1.959-7, 1.959-10, 1.959-11, 1.960-1, 1.960-3, 1.961-1 through 1.961-5, 1.961-8 through 1.961-13, 1.965-5(d)(5), 1.986(a)-1, 1.986(c)-1, and 1.1502-59.
(3) Open period of limitations condition. The period of limitations on assessment for each taxable year described in paragraph (d)(2) of this section is open under section 6501.
(4) Written consent condition. Each covered shareholder described in paragraph (d)(2) of this section provides to the early application corporation a written statement in which the covered shareholder consents to apply the rules described in paragraph (d)(2) of this section to the taxable years of the covered shareholder described in paragraph (d)(2) of this section and affirms that the period of limitations on assessment for each such taxable year is open under section 6501.