[Code of Federal Regulations]
[Title 26, Volume 9]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.853-1]

[Page 43]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec.  1.853-1  Foreign tax credit allowed to shareholders.

    (a) In general. Under section 853, a regulated investment company, 
meeting the requirements set forth in section 853(a) and paragraph (b) 
of this section, may make an election with respect to the income, war-
profits, and excess profits taxes described in section 901(b)(1) which 
it pays to foreign countries or possessions of the United States during 
the taxable year, including such taxes as are deemed paid by it under 
the provisions of any income tax convention to which the United States 
is a party. If an election is made, the shareholders of the regulated 
investment company shall apply their proportionate share of such foreign 
taxes paid, or deemed to have been paid by it pursuant to any income tax 
convention, as either a credit (under section 901) or as a deduction 
(under section 164(a)) as provided by section 853(b)(2) and paragraph 
(b) of Sec.  1.853-2. The election is not applicable with respect to 
taxes deemed to have been paid under section 902 (relating to the credit 
allowed to corporate stockholders of a foreign corporation for taxes 
paid by such foreign corporation).
    (b) Requirements. To qualify for the election provided in section 
853(a), a regulated investment company (1) must have more than 50 
percent of the value of its total assets, at the close of the taxable 
year for which the election is made, invested in stocks and securities 
of foreign corporations, and (2) must also, for that year, comply with 
the requirements prescribed in section 852(a) and paragraph (a) of Sec.  
1.852-1. The term ``value'', for purposes of the first requirement, is 
defined in section 851(c)(4). For the definition of foreign corporation, 
see section 7701(a).