# Limitation of section 245A deduction and section 954(c)(6) exception.
**AGENCY:**
Internal Revenue Service (IRS), Treasury.
**ACTION:**
Correcting amendments.
**SUMMARY:**
This document contains corrections to the final regulations (Treasury Decision 9909) that were published in the *Federal Register* on Thursday, August 27, 2020. Treasury Decision 9909 contained final regulations under sections 245A and 954 of the Internal Revenue Code (the “Code”) that limit the deduction for certain dividends received by United States persons from foreign corporations under section 245A and the exception to subpart F income under section 954(c)(6) for certain dividends received by controlled foreign corporations.
**DATES:**
These corrections are effective on November 13, 2020.
**FOR FURTHER INFORMATION CONTACT:**
Arielle M. Borsos or Logan M. Kincheloe at (202) 317-6937 (not a toll-free number).
**SUPPLEMENTARY INFORMATION:**
**Background**
The final regulations (TD 9909) that are the subject of this correction are issued under sections 245A, 954(c)(6), and 6038 of the Internal Revenue Code.
**Need for Correction**
As published on August 27, 2020 (85 FR 53068), the final regulations (TD 9909; FR Doc. 2020-18543) contain errors that need to be corrected.
**List of Subjects in 26 CFR Part 1**
Income taxes, Reporting and recordkeeping requirements.
**Correction of Publication**
Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:
**PART 1—INCOME TAXES**
**26 CFR Part 1**
*Paragraph 1.* The authority citation for part 1 continues to read in part as follows:
**Authority:**
26 U.S.C. 7805 * * *
**26 CFR Part 1**
*Par. 2.* Section 1.245A-5 is amended by:
a. Adding a sentence after the first sentence of paragraph (e)(3)(i)(A); and
b. Revising paragraphs (i)(8) and (9) and the first sentence of paragraph (j)(10)(ii).
The addition and revisions read as follows:
§ 1.245A-5
(e) * * *
(3) * * *
(i) * * *
(A) * * * Because the determination as to whether there would be an extraordinary reduction amount or tiered extraordinary reduction amount greater than zero is made without regard to this paragraph (e)(3)(i), this determination is made without taking into account any elections that may be available, or other events that may occur, solely by reason of an election described in this paragraph (e)(3)(i), such as the application of section 954(b)(4) to a short taxable year created as a result of the election. * * *
(i) * * *
(8) *Extraordinary disposition E&P.* The term *extraordinary disposition E&P* has the meaning set forth in paragraph (c)(3)(i)(C) of this section.
(9) *Extraordinary disposition ownership percentage.* The term *extraordinary disposition ownership percentage* has the meaning set forth in paragraph (c)(3)(i)(B) of this section.
(j) * * *
(10) * * *
(ii) * * * Because the loan from CFC1 to CFC2 and the subsequent distribution of cash were carried out with a principal purpose of avoiding the purposes of this section, appropriate adjustments are required to be made under the anti-abuse rule in paragraph (h) of this section. * * *
Crystal Pemberton,
Senior Federal Register Liaison, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).