26 U.S.C. § 78
Gross up for deemed paid foreign tax credit
If a domestic corporation chooses to have the benefits of subpart A of part III of subchapter N (relating to foreign tax credit) for any taxable year, an amount equal to the taxes deemed to be paid by such corporation under subsections (a) and (d) of section 960 (determined without regard to the phrase “90 percent of” in subsection (d)(1) thereof) for such taxable year shall be treated for purposes of this title (other than sections 245 and 245A) as a dividend received by such domestic corporation from the foreign corporation.
Notes of Decisions
Cited in 11
cases, 1975–1996 · leading case: FW Woolworth Co. v. Taxation & Revenue Dept. of NM, 458 U.S. 354 (1982).
FW Woolworth Co. v. Taxation & Revenue Dept. of NM, 458 U.S. 354 (1982). “5 million of "gross-up" that it never actually received but that the Federal Government (for purposes of calculating Woolworth's federal foreign tax credit pursuant to 26 U. S. C. §§ 78 , 901(a), and 902(a)) deemed Woolworth to have received from its foreign subsidiaries.”
E.I. Du Pont De Nemours & Co. v. State Tax Assessor, 675 A.2d 82 (Me. 1996). “26 U.S.C.A. § 78 (West 1988 & Supp.1995).”
Caterpillar Tractor Co. v. Lenckos, 395 N.E.2d 1167 (Ill. App. Ct. 1979). “The deemed taxes may be claimed as a foreign tax credit only if an offsetting amount is treated as dividend income received by the domestic corporation. 26 U.S.C. §§78 & 902 (1976).”
NCR Corp. v. Comptroller of the Treasury, 544 A.2d 764 (Md. 1988). “By virtue of 26 U.S.C. § 78 , NCR was required to treat those “deemed paid” credits as “grossed-up” dividend income for federal tax purposes (hence the term “gross-up”).”
Flint Resources Co. v. State ex rel. Oklahoma Tax Comm'n, 780 P.2d 665 (Okla. 1989). “The credit for taxes deemed paid reduces dollar for dollar the actual federal tax due.”
Matter of Income Tax Protest, 780 P.2d 665 (Okla. 1989). “Generally, it is more advantageous for a domestic corporation to take the foreign tax credit. The credit for taxes deemed paid reduces dollar for dollar the actual federal tax due.”
In Re Tax Appeal of Morton Thiokol, Inc., 864 P.2d 1175 (Kan. 1993). “26 U.S.C. § 78 (1988) states in pertinent part: “If a domestic corporation chooses to have .”
Kraft, Inc. v. Sweet, 572 N.E.2d 389 (Ill. App. Ct. 1991). “The Kraft Group also maintains that treatment by the Department of subtractions arising from the operation of section 78 of the IRC ( 26 U.S.C. §78 (1982)) under section 203(b)(2)(N) of the IITA is inconsistent with the position taken by the Department concerning the subpart F…”
Sutin, Thayer & Browne v. Revenue Div. of the Taxation & Revenue Dep't, 725 P.2d 833 (N.M. Ct. App. 1984). “See 26 U.S.C. § 78 (1982). The United States Supreme Court in Woolworth III reversed the New Mexico Supreme Court on both the dividend and “gross-up” issues.”
In Re Goodyear T. & R. Co., Corp. Income T., 1966, 1967, 1968, 335 A.2d 310 (Vt. 1975). “Furthermore, 26 U.S.C.A. § 78 specifically includes “gross-up” in taxable income “ [i] f a domestic corporation chooses to have the benefits” of this foreign tax credit.”
Goodyear Tire & Rubber Co. v. United States, 14 Cl. Ct. 23 (Ct. Cl. 1987). “Section 78 of the Internal Revenue Code of 1954, 26 U.S.C. § 78 (1954), requires that the amount of tax deemed paid by the domestic corporation be included in its gross income, a computation referred to as "grossing-up.”
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