ODL AND OFL RULES - FINAL REGS

On Jun 21, 2012, Treasury and the IRS issued final Regulations (TD 9595) under Sections 904(f) and (g), implementing the overall domestic loss (ODL) regime enacted in the American Jobs Creation Act of 2004, PL 108-357, Oct 22, 2004. They also provide updates that reflect statutory amendments to the...

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Bibliographic Details
Published in:Journal of International Taxation 2012-09, Vol.23 (9), p.13
Main Authors: Sotos, David, Fischl, Alan, Rosenberg, Rebecca, DiFronzo, Michael, Lubkin, Greg, Marcus, Phyllis
Format: Article
Language:English
Subjects:
Capital gains
Corporate taxes
Foreign tax credits
International taxation
Losses
Net losses
Provisions
Recapture rules
Revisions
Tax credits
Tax legislation
Tax regulations
Taxable income
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Summary:On Jun 21, 2012, Treasury and the IRS issued final Regulations (TD 9595) under Sections 904(f) and (g), implementing the overall domestic loss (ODL) regime enacted in the American Jobs Creation Act of 2004, PL 108-357, Oct 22, 2004. They also provide updates that reflect statutory amendments to the overall foreign loss (OFL) rules enacted since 1986. The article discusses the following specifics: 1. ODL accounts and recapture; 2. updating of OFL rules; 3. updating of separate limitation loss (SLL) rules; 4. coordination of OFLs, SLLs, ODLs; 5. consolidated ODL accounts; 6. coordination of high-taxed income and capital gains adjustments; and 7. coordination of OFL recapture provisions when not otherwise recognized. In general, taxpayers should find little change in their application of the ODL and OFL rules under the final Regulations. The option to apply the final Regulations retroactively gives taxpayers flexibility that may prove useful.
ISSN:1049-6378