
The Impact of Revenue Procedure 2019-40 on GILTI and Subpart F Inclusions
By Anthony Diosdi In the CFC context, Section 958(b) provides that the constructive ownership rules of Section 318(a), with certain modifications, apply for purposes of determining whether: 1) a U.S. person is a U.S. shareholder (within the meaning of Section 951(b)); 2) a foreign corporation is a CFC under Section 957; 3) the stock of a domestic corporation is owned by a U.S. shareholder of a CFC for purposes of Section 956(c)(2); and 4) a corporation or other person is related to the CFC for purposes of Section 954(d)(3). Prior to the enactment of the 2017 Tax Cuts and Jobs Act, Section 958(b) provided a taxpayer friendly rule, in Section 958(b)(4), which disallowed so-called downward attribution. Specifically, Section 958(b)(4) provided the Subparagraphs (A0, (B), (c) of Section 318(a)(3) shall not…