Final regulations issued for determination of earnings and profits attributable to stock of CFCs

The US Treasury Department and Internal Revenue Service (IRS) have issued final regulations for determining the earnings and profits (E&P) attributable to stock of controlled foreign corporations (CFCs) under Section 1248 of the US Internal Revenue Code.

Section 1248 requires that all or a portion of the gain recognized on the sale or exchange of stock of a CFC by a US shareholder (i.e., an owner of 10% or more of the voting stock) will be treated as a div…