IRC 965 Transition Tax Overview
Internal Revenue Manual Part 3. Submission Processing · 2026-10-03 edition · updated 2026-10-04 · United States
IRC 965 is a provision of the Tax Cuts and Jobs Act (TCJA) of 2017 that requires certain taxpayers to pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States.
The following persons/entities reported amounts under section 965 of the code on their tax return:
US shareholders of a deferred foreign income corporation.
Certain direct/indirect domestic partners in domestic partnerships that are United States shareholders of specified foreign corporations.
Shareholders in a S corporation that is a United States shareholder of a specified foreign corporation.
Certain beneficiaries of another pass-through entity that is a United States shareholder of a specified foreign corporation.
Certain beneficiaries of a cooperative association that is a United States shareholder of a specified foreign corporation.
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