124 STAT. 2395 PUBLIC LAW 111–226—AUG. 10, 2010 a rule similar to the rule of the preceding sentence shall apply in the case of any S corporation or trust. ‘‘(2) TREATMENT OF FOREIGN TAXES AFTER SUSPENSION.— In the case of any foreign income tax not taken into account by reason of subsection (a) or (b), except as otherwise provided by the Secretary, such tax shall be so taken into account in the taxable year referred to in such subsection (other than for purposes of section 986(a)) as a foreign income tax paid or accrued in such taxable year. ‘‘(d) DEFINITIONS.—For purposes of this section— ‘‘(1) FOREIGN TAX CREDIT SPLITTING EVENT.—There is a foreign tax credit splitting event with respect to a foreign income tax if the related income is (or will be) taken into account under this chapter by a covered person. ‘‘(2) FOREIGN INCOME TAX.—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. ‘‘(3) RELATED INCOME.—The term ‘related income’ means, with respect to any portion of any foreign income tax, the income (or, as appropriate, earnings and profits) to which such portion of foreign income tax relates. ‘‘(4) COVERED PERSON.—The term ‘covered person’ means, with respect to any person who pays or accrues a foreign income tax (hereafter in this paragraph referred to as the ‘payor’)— ‘‘(A) any entity in which the payor holds, directly or indirectly, at least a 10 percent ownership interest (deter- mined by vote or value), ‘‘(B) any person which holds, directly or indirectly, at least a 10 percent ownership interest (determined by vote or value) in the payor, ‘‘(C) any person which bears a relationship to the payor described in section 267(b) or 707(b), and ‘‘(D) any other person specified by the Secretary for purposes of this paragraph. ‘‘(5) SECTION 902 CORPORATION.—The term ‘section 902 cor- poration’ means any foreign corporation with respect to which one or more domestic corporations meets the ownership require- ments of subsection (a) or (b) of section 902. ‘‘(e) REGULATIONS.—The Secretary may issue such regulations or other guidance as is necessary or appropriate to carry out the purposes of this section, including regulations or other guidance which provides— ‘‘(1) appropriate exceptions from the provisions of this sec- tion, and ‘‘(2) for the proper application of this section with respect to hybrid instruments.’’. (b) CLERICAL AMENDMENT.—The table of sections for subpart A of part III of subchapter N of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: ‘‘Sec. 909. Suspension of taxes and credits until related income taken into ac- count.’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to— 26 USC 909 note.
