Source: https://www.law.cornell.edu/uscode/text/26/907
Timestamp: 2017-11-19 07:02:05
Document Index: 36867116

Matched Legal Cases: ['§ 907', '§ 907', '§ 907', '§\u202f11801', '§\u202f601', '§\u202f1031', '§\u202f301', '§\u202f701', '§\u202f211', '§\u202f1012', '§\u202f11801', '§\u202f13235', '§\u202f1704', '§\u202f417', '§\u202f402', '§\u202f210', '§\u202f11811', '§\u202f402', '§\u202f402', '§\u202f402', '§\u202f402', '§\u202f417', '§\u202f417', '§\u202f417', '§\u202f11801', '§\u202f11801', '§\u202f1012', '§\u202f1012', '§\u202f211', '§\u202f211', '§\u202f211', '§\u202f211', '§\u202f211', '§\u202f211', '§\u202f211', '§\u202f211', '§\u202f301', '§\u202f701', '§\u202f1035', '§\u202f1032', '§\u202f1035', '§\u202f1031', '§\u202f1031', '§\u202f1032', '§\u202f1032', '§\u202f402', '§\u202f211', '§\u202f306', '§\u202f712', '§\u202f701', '§\u202f2', '§\u202f1035', '§\u202f2', '§\u202f601', '§\u202f1035', '§\u202f701', '§\u202f2']

26 U.S. Code § 907 - Special rules in case of foreign oil and gas income | US Law | LII / Legal Information Institute
U.S. Code › Title 26 › Subtitle A › Chapter 1 › Subchapter N › Part III › Subpart A › § 907
26 U.S. Code § 907 - Special rules in case of foreign oil and gas income
(a) Reduction in amount allowed as foreign tax under section 901In applying section 901, the amount of any foreign oil and gas taxes paid or accrued (or deemed to have been paid) during the taxable year which would (but for this subsection) be taken into account for purposes of section 901 shall be reduced by the amount (if any) by which the amount of such taxes exceeds the product of—
in the case of an individual, a fraction the numerator of which is the tax against which the credit under section 901(a) is taken and the denominator of which is the taxpayer’s entire taxable income.
(b) Combined foreign oil and gas income; foreign oil and gas taxesFor purposes of this section—
(1) Combined foreign oil and gas incomeThe term “combined foreign oil and gas income” means, with respect to any taxable year, the sum of—
(2) Foreign oil and gas taxesThe term “foreign oil and gas taxes” means, with respect to any taxable year, the sum of—
(c) Foreign income definitions and special rulesFor purposes of this section—
(1) Foreign oil and gas extraction incomeThe term “foreign oil and gas extraction income” means the taxable income derived from sources without the United States and its possessions from—
(2) Foreign oil related incomeThe term “foreign oil related income” means the taxable income derived from sources outside the United States and its possessions from—
(3) Dividends, interest, partnership distribution, etc.The term “foreign oil and gas extraction income” and the term “foreign oil related income” include—
the taxpayer’s distributive share of the income of partnerships.[1]
(A) In generalThe combined foreign oil and gas income of a taxpayer for a taxable year (determined without regard to this paragraph) shall be reduced—
(B) Reduction for pre-2009 foreign oil extraction lossesThe reduction under this paragraph shall be equal to the lesser of—
(C) Reduction for post-2008 foreign oil and gas lossesThe reduction under this paragraph shall be equal to the lesser of—
(i) In generalFor purposes of this paragraph, the term “foreign oil and gas loss” means the amount by which—
(iii) Expropriation and casualty losses not taken into accountFor purposes of clause (i), there shall not be taken into account—
[(e) Repealed. Pub. L. 101–508, title XI, § 11801(a)(32), Nov. 5, 1990, 104 Stat. 1388–521]
If the amount of the foreign oil and gas taxes paid or accrued during any taxable year exceeds the limitation provided by subsection (a) for such taxable year (hereinafter in this subsection referred to as the “unused credit year”), such excess shall be deemed to be foreign oil and gas taxes paid or accrued in the first preceding taxable year and in any of the first 10 succeeding taxable year,[2] in that order and to the extent not deemed tax paid or accrued in a prior taxable year by reason of the limitation imposed by paragraph (2). Such amount deemed paid or accrued in any taxable year may be availed of only as a tax credit and not as a deduction and only if the taxpayer for such year chooses to have the benefits of this subpart as to taxes paid or accrued for that year to foreign countries or possessions.
(2) LimitationThe amount of the unused foreign oil and gas taxes which under paragraph (1) may be deemed paid or accrued in any preceding or succeeding taxable year shall not exceed the lesser of—
(Added Pub. L. 94–12, title VI, § 601(a), Mar. 29, 1975, 89 Stat. 54; amended Pub. L. 94–455, title X, §§ 1031(b)(6), 1032(b), 1035(a), (b), (d)(1), (2), 1052(c)(4), Oct. 4, 1976, 90 Stat. 1623, 1626, 1630–1632, 1648; Pub. L. 95–600, title III, § 301(b)(14), title VII, § 701(u)(8)(A), (B), Nov. 6, 1978, 92 Stat. 2822, 2916; Pub. L. 97–248, title II, § 211(a)–(c)(1), (d), Sept. 3, 1982, 96 Stat. 448–450; Pub. L. 100–647, title I, § 1012(g)(6), Nov. 10, 1988, 102 Stat. 3501; Pub. L. 101–508, title XI, § 11801(a)(32), Nov. 5, 1990, 104 Stat. 1388–521; Pub. L. 103–66, title XIII, § 13235(a)(1), Aug. 10, 1993, 107 Stat. 504; Pub. L. 104–188, title I, § 1704(t)(36), Aug. 20, 1996, 110 Stat. 1889; Pub. L. 108–357, title IV, § 417(b), Oct. 22, 2004, 118 Stat. 1512; Pub. L. 110–343, div. B, title IV, § 402(a)–(c), Oct. 3, 2008, 122 Stat. 3852, 3854; Pub. L. 113–295, div. A, title II, § 210(e), Dec. 19, 2014, 128 Stat. 4031.)
[2]  So in original. Probably should be “years,”.
Section 172(h), referred to in subsec. (c)(4)(D)(iii)(I), was repealed by Pub. L. 101–508, title XI, § 11811(b)(1), Nov. 5, 1990, 104 Stat. 1388–532.
2014—Subsec. (f)(4)(A). Pub. L. 113–295 substituted “this subsection, as in effect on the day before the date of the enactment of the Energy Improvement and Extension Act of 2008, shall apply to unused oil and gas extraction taxes carried from such unused credit year to a taxable year beginning after December 31, 2008.” for “this subsection shall be applied to any unused oil and gas extraction taxes carried from such unused credit year to a year beginning after December 31, 2008—
“(i) by substituting ‘oil and gas extraction taxes’ for ‘foreign oil and gas taxes’ each place it appears in paragraphs (1), (2), and (3), and
“(ii) by computing, for purposes of paragraph (2)(A), the limitation under subparagraph (A) for the year to which such taxes are carried by substituting ‘foreign oil and gas extraction income’ for ‘foreign oil and gas income’ in subsection (a).”
2008—Subsecs. (a), (b). Pub. L. 110–343, § 402(a), amended subsecs. (a) and (b) generally. Prior to amendment, subsec. (a) related to reduction in amount of oil and gas extraction taxes paid or accrued for purposes of section 901 and subsec. (b) excepted certain amounts of foreign oil related income taxes paid or accrued to any foreign country from the definition of “income, war profits, and excess profits taxes”.
Subsec. (c)(4). Pub. L. 110–343, § 402(b), amended par. (4) generally. Prior to amendment, par. (4) provided for recapture of foreign oil and gas extraction losses by recharacterizing later extraction income.
Subsec. (f). Pub. L. 110–343, § 402(c)(1), substituted “foreign oil and gas taxes” for “oil and gas extraction taxes” wherever appearing.
Subsec. (f)(4). Pub. L. 110–343, § 402(c)(2), added par. (4).
2004—Subsec. (f)(1). Pub. L. 108–357, § 417(b)(3), struck out at end “For purposes of this subsection, the terms ‘second preceding taxable year’, and ‘first preceding taxable year’ do not include any taxable year ending before January 1, 1975.”
Pub. L. 108–357, § 417(b)(2), substituted “and in any of the first 10” for “, and in the first, second, third, fourth, or fifth”.
Pub. L. 108–357, § 417(b)(1), struck out “in the second preceding taxable year,” before “in the first preceding taxable year”.
1990—Subsec. (e). Pub. L. 101–508, § 11801(a)(32), struck out subsec. (e) which read as follows:
Subsec. (f)(3)(C). Pub. L. 101–508, § 11801(a)(32), struck out subpar. (C) which read as follows: “For purposes of determining the amount of the unused oil and gas extraction taxes which under paragraph (1) may be deemed paid or accrued in any taxable year ending before January 1, 1977, subparagraph (A) of paragraph (2) shall be applied as if the amendment made by section 1035(a) of the Tax Reform Act of 1976 applied to such taxable year.”
1988—Subsec. (c)(3). Pub. L. 100–647, § 1012(g)(6)(B), struck out “and dividends described in subparagraph (B)” after “described in subparagraph (A)” in closing provisions.
Subsec. (c)(3)(B) to (D). Pub. L. 100–647, § 1012(g)(6)(A), redesignated subpars. (C) and (D) as (B) and (C), respectively, and struck out former subpar. (B) which read as follows: “dividends from a domestic corporation which are treated under section 861(a)(2)(A) as income from sources without the United States,”.
1982—Subsec. (b). Pub. L. 97–248, § 211(c)(1), added subsec. (b). Former subsec. (b), which had provided that section 904 be applied separately with respect to foreign oil related income and other taxable income, was struck out.
Subsec. (c)(2). Pub. L. 97–248, § 211(b), in subpar. (A) substituted “the processing of minerals extracted (by the taxpayer or by any other person) from oil or gas wells into their primary products” for “the extraction (by the taxpayer or any other person) of minerals from oil or gas wells”, deleted subpar. (B) which had provided that foreign oil related income meant the taxable income derived from sources outside the United States and its possessions from the processing of minerals from oil or gas wells into their primary products, redesignated subpar. (C) as (B), redesignated subpar. (D) as (C) and in subpar. (C) as so redesignated struck out “or” at the end, redesignated subpar. (E) as (D) and in subpar. (D) as so redesignated substituted “disposition” for “sale or exchange”, and “or (C), or” for “(C), or (D)”, struck out the period at the end, and added subpar. (E).
Subsec. (c)(4). Pub. L. 97–248, § 211(a), substituted provisions regarding the recapture of foreign oil and gas extraction losses by recharacterization of later extraction income for provisions that if, for any foreign country for any taxable year, the taxpayer would have had a net operating loss if only items from sources within such country (including deductions properly apportioned or allocated thereto) which related to the extraction of minerals from oil or gas wells had been taken into account, such items would not be taken into account in computing foreign oil and gas extraction income for such year, but would be taken into account in computing foreign oil related income for such year.
Subsec. (e). Pub. L. 97–248, § 211(d)(1), substituted rules regarding credits arising in taxable years beginning before Jan. 1, 1983, for rules regarding taxable years ending after Dec. 31, 1974, in par. (1), and in par. (2) substituted rules regarding carryback of credits arising in taxable years beginning after Dec. 31, 1982, for rules regarding taxable years ending after Dec. 31, 1975.
Subsec. (f)(1). Pub. L. 97–248, § 211(d)(2)(A), substituted “such excess” for “so much of such excess as does not exceed 2 percent of foreign oil and gas extraction income for such taxable year” in first sentence, and struck out former provision that had directed that the above substitution be made regarding taxes deemed paid or accrued in any taxable year which ended in 1975, 1976, or 1977.
Subsec. (f)(2)(B). Pub. L. 97–248, § 211(d)(2)(B)(i), substituted “provided by section 904 for such taxable year” for “provided by section 904 on taxes paid or accrued with respect to foreign oil-related income for such taxable year” in the introductory provisions, and in cl. (i) substituted “the United States during such taxable year” for “the United States with respect to such income during such taxable year”.
Subsec. (f)(3)(A). Pub. L. 97–248, § 211(d)(2)(B)(ii), substituted “section 904(c)” for “section 904(c) with respect to oil-related income”.
Subsec. (f)(3)(B). Pub. L. 97–248, § 211(d)(2)(B)(iii), struck out “oil-related” after “determining the amount of”.
1978—Subsec. (a)(2). Pub. L. 95–600, §§ 301(b)(14), 701(u)(8)(A), designated existing provisions as subpar. (A), inserted applicability to corporations and generally reworked applicable formula, and added subpar. (B).
Subsec. (b). Pub. L. 95–600, § 701(u)(8)(B), substituted provisions relating to applicability of section 904 separately to foreign oil related income and other taxable income for provisions relating to applicability of section 904 to corporations and other taxpayers.
1976—Subsec. (a). Pub. L. 94–455, § 1035(a), substituted “oil and gas extraction taxes” for “income, war profits, and excess profits taxes” after “the amount of any” and, in par. (2), substituted “the percentage which is the sum of the normal tax rate and the surtax rate for the taxable year specified in section 11” for provisions giving the percentage multiplier for years ending 1975, 1976, and after 1976.
Subsec. (b). Pub. L. 94–455, §§ 1032(b)(1), 1035(b), inserted provisions making a distinction between corporations and other taxpayers and rules applicable to each and, as amended, struck out provision requiring the overall limitation, rather than the per-country limitation, be applied in the case of a corporation to foreign oil-related income and, a taxpayer other than a corporation, to foreign oil and gas extraction income.
Subsec. (c)(5). Pub. L. 94–455, § 1035(d)(2), added par. (5).
Subsec. (e)(1). Pub. L. 94–455, § 1031(b)(6)(A), substituted “(d) and (e) of section 904 (as in effect on the day before the date of enactment of the Tax Reform Act of 1976)” for “(d) and (e) of section 904” after “In applying subsections”.
Subsec. (e)(2). Pub. L. 94–455, § 1031(b)(6), substituted “(d) and (e) of section 904 (as in effect on the day before the date of enactment of the Tax Reform Act of 1976)” for “(d) and (e) of section 904” after “In applying subsections”, “section 904(a)(1) (as so in effect)” for “section 904(a)(1)” after “provided by section” and, in subpar. (A), “section 904(e)(2) (as so in effect)” for “section 904(e)(2)” after “sentence of section”.
Subsec. (f). Pub. L. 94–455, §§ 1032(b)(2), 1035(d)(1), added subsec. (f). Former subsec. (f), relating to recapture of foreign oil related loss, was struck out.
Subsec. (g). Pub. L. 94–455, §§ 1032(b)(2), 1035(d)(1), 1052(c)(4), struck out subsec. (g) relating to Western Hemisphere trade corporations which are members of an affiliated group.
Pub. L. 110–343, div. B, title IV, § 402(e), Oct. 3, 2008, 122 Stat. 3854, provided that:
“The amendments made by this section [amending this section and section 6501 of this title] shall apply to taxable years beginning after December 31, 2008.”
Pub. L. 97–248, title II, § 211(e), Sept. 3, 1982, 96 Stat. 450, as amended by Pub. L. 97–448, title III, § 306(a)(5), 96 Stat. 2401; Pub. L. 98–369, div. A, title VII, § 712(e), July 18, 1984, 98 Stat. 947, provided that:
Except as provided in paragraph (2), the amendments made by this section [amending this section and section 904 of this title] shall apply to taxable years beginning after December 31, 1982.
“(2)Retention of old sections 907(b) and 904(f)(4) where taxpayer had separate basket foreign loss.—
If, after applying old sections 907(b) and 904(f)(4) to a taxable year beginning before January 1, 1983, the taxpayer had a separate basket foreign loss, such loss shall not be recaptured from income of a kind not taken into account in computing the amount of such separate basket foreign loss more rapidly than ratably over the 8-year period (or such shorter period as the taxpayer may select) beginning with the first taxable year beginning after December 31, 1982.
The term ‘separate basket foreign loss’ means any foreign loss attributable to activities taken into account (or not taken into account) in determining foreign oil related income (as defined in old section 907(c)(2)).
An ‘old’ section is such section as in effect on the day before the date of the enactment of this Act [Sept. 3, 1982].”
Pub. L. 95–600, title VII, § 701(u)(8)(D), Nov. 6, 1978, 92 Stat. 2916, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
The amendments made by this paragraph [amending this section and section 904 of this title] shall apply, in the case of individuals, to taxable years ending after December 31, 1974, and, in the case of corporations, to taxable years ending after December 31, 1976.
In the case of any taxable year ending after December 31, 1975, with respect to foreign oil related income (within the meaning of section 907(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), the overall limitation provided by section 904(a)(2) of such Code shall apply and the per-country limitation provided by section 904(a)(1) of such Code shall not apply.”
Pub. L. 94–455, title X, § 1035(e), Oct. 4, 1976, 90 Stat. 1633, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after December 31, 1976.
The amendment made by subsection (b) [amending this section] shall apply to taxable years ending after December 31, 1974; except that the last sentence of section 907(b) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall only apply to taxable years ending after December 31, 1975.
The amendment made by subsection (c) [enacting provisions set out below] shall apply to taxable years beginning after June 29, 1976.
The amendments made by subsection (d) [amending this section] shall apply to taxes paid or accrued during taxable years ending after the date of the enactment of this Act [Oct. 4, 1976].”
Pub. L. 94–12, title VI, § 601(d), Mar. 29, 1975, 89 Stat. 58, provided that:
“The amendments made by this section [enacting this section and amending section 901 of this title] shall apply to taxable years ending after December 31, 1974; except that—
the second sentence of section 907(b) shall apply to taxable years ending after December 31, 1975, and
the provisions of section 907(f) shall apply to losses sustained in taxable years ending after December 31, 1975.”
Pub. L. 94–455, title X, § 1035(c), Oct. 4, 1976, 90 Stat. 1631, as amended by Pub. L. 95–600, title VII, §§ 701(u)(9), 703(h)(1), Nov. 6, 1978, 92 Stat. 2916, 2940; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
For purposes of section 901 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], there shall be treated as income, war profits, and excess profits taxes to be taken into account under section 907(a) of such Code amounts designated as income taxes of a foreign government by such government (which otherwise would not be treated as taxes for purposes of section 901 of such Code) with respect to production-sharing contracts for the extraction of foreign oil or gas.
the product of the foreign oil and gas extraction income (as defined in section 907(c) of such Code) with respect to all such production-sharing contracts multiplied by the sum of the normal tax rate and the surtax rate for the taxable year specified in section 11 of such Code, or
the excess of the total amount of foreign oil and gas extraction income (as so defined) for the taxable year multiplied by the sum of the normal tax rate and the surtax rate for the taxable year specified in section 11 of such Code over the amount of any income, war profits, and excess profits taxes paid or accrued (or deemed to have been paid) without regard to paragraph (1) during the taxable year with respect to foreign oil and gas extraction income.
The production-sharing contracts taken into account for purposes of paragraph (1) shall be those contracts which were entered into before April 8, 1976, for the sharing of foreign oil and gas production with a foreign government (or an entity owned by such government) with respect to which amounts claimed as taxes paid or accrued to such foreign government for taxable years beginning before June 30, 1976, will not be disallowed as taxes. A contract described in the preceding sentence shall be taken into account under paragraph (1) only with respect to amounts (A) paid or accrued to the foreign government before January 1, 1978, and (B) attributable to income earned before such date.”
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