Case: Taxpayer Permitted to Claim Dividends Received Deduction for Section 78 Dividend Income, but Foreign Tax Credit was Limited (T.C.) (IRC §245A)

Taxpayer was entitled to claim a dividends received deduction (DRD) under I.R.C. §245A on the same income reported as a foreign dividend gross up under §78, but the amount of Foreign Tax Credit (FTC) Taxpayer may claim was limited, the U.S. Tax Court held. As part of the TCJA, Congress passed several laws affecting the taxation of foreign-sourced income, including: (1) new §245A granting U.S. corporations a deduction for the foreign-source portion of any dividends received from certain foreign corporations; and (2) an amendment to §78 excluding money treated as a dividend under that section from qualifying for a DRD ...