Subpart F income earned by a CFC will always be treated as a deemed dividend to the CFC's U.S. shareholders in the year the subpart F income is earned.

Question

Quizplus · Accepted Answer

Subpart F income is included in the U.S. shareholders' gross income in the year it is earned by the CFC, but it is treated as a deemed distribution for tax purposes, not an actual dividend. This means U.S. shareholders must include this income on their tax returns, even if no actual cash or property distributions are made.

Subpart F Income Earned by a CFC Will Always Be