§962 Election by individuals to be subject to tax at corporate rates

Summary

A U.S. individual shareholder can choose to have certain foreign-company income taxed as if it were received by a U.S. corporation. Under rules the Treasury sets, amounts included in the shareholder’s income under section 951(a) will be taxed at the corporate tax rate that section 11 sets instead of the individual rates in sections 1 and 55. For foreign tax credit rules, those amounts are treated like a domestic corporation received them. The choice must be made when and how the Treasury says, and it can’t be undone without permission. Each corporate tax bracket’s share is limited so it matches the ratio of the included amount to the shareholder’s pro rata share of the foreign companies’ earnings and profits. If those foreign earnings are later distributed, the distribution is taxable to the extent it exceeds the tax already paid under this chapter on the amounts covered by the election.