Section 2. Information To Determine

Foreign-Derived Deduction Eligible Income (FDDEI) on Form 8993

Foreign-derived gross receipts means, for a partnership, gross receipts of the partnership for the partnership’s tax year that are used to figure the amount of gross FDDEI as defined in Regulations section 1.250(b)-1(c)(16) for gross FDDEI.

Each place where general property is listed refers to amounts connected to the sale, lease, exchange, or other disposition of general property to a foreign person and is for a foreign use as defined in Regulations sections 1.250(b)-3 and 1.250(b)-4(d). The term “general property” means any property other than intangible property; a security (as defined in section 475(c)(2)); an interest in a partnership, trust, or estate; or a commodity described in section 475(e)(2)(A) that isn’t a physical commodity or a commodity described in sections 475(e)(2)(B) through (D). See Regulations section 1.250(b)-3(b)(10).

Each place where intangible property is listed refers to amounts connected to the sale, license, exchange, or other disposition of intangible property to a foreign person and is for a foreign use as defined in Regulations sections 1.250(b)-3 and 1.250(b)-4(d)(2).

Each place where services are listed refers to amounts connected to services that are provided to any person, or for property, located outside the United States as defined in Regulations section 1.250(b)-5.

If a transaction includes both a sales component and a service component, the transaction is classified as either a sale or a service according to the overall predominant character of the transaction. See Regulations section 1.250(b)-3(d).

Note: Don’t include any income and gain from the sale or other disposition (including pursuant to the deemed sale or other deemed disposition or a transaction subject to section 367(d)) of intangible property (as defined in section 367(d)(4)), and any other property of a type that is subject to depreciation, amortization, or depletion by the seller, occurring after June 16, 2025 (see the instructions for line 3a and line 3b, earlier).

For purposes of determining a domestic corporation’s deductions that are properly allocable to gross FDDEI, the corporation’s deductions are allocated and apportioned to gross FDDEI under the rules of Regulations sections 1.861-8 through 1.861-14T and 1.861-17 by treating section 250(b) as an operative section described in Regulations section 1.861-8(f). See Regulations section 1.250(b)-1(d)(2).

Line 9. Gross receipts. Enter the amount, if any, of the partnership’s foreign-derived gross receipts separately for aggregate sales of general property, aggregate sales of intangible property, and aggregate services. Foreign-derived gross receipts means gross receipts that are used to figure gross FDDEI as defined in Regulations section 1.250(b)-1(c)(16).

Line 10. COGS. Enter the amount of cost of goods sold attributable to the amount(s) on line 9.

For purposes of this form, when figuring FDDEI, cost of goods sold includes the cost of goods sold to customers, and the adjusted basis of non-inventory property sold or otherwise disposed of in a trade or business.

In making that determination, attribute costs of goods sold to gross receipts using a reasonable method in accordance with Regulations section 1.250(b)-1(d)(1).

Cost of goods sold must be attributed to gross receipts for gross DEI or gross FDDEI regardless of whether certain costs included in cost of goods sold can be associated with activities undertaken in an earlier tax year (including a year before the effective date of section 250).

Line 11. Allocable deductions. Enter the amount of the allocable deductions. See Regulations section 1.250(b)-1(d)(2) for more details. Enter the amounts of interest and R&E expenses on lines 13 and 16, respectively. Deductions are determined without regard to sections 163(j),170(b)(2), 172, 246(b), and 250.

Column (a). General property. Enter the amount of the deductions that are allocated and apportioned to gross FDDEI from all sales of general property.

Column (b). Intangible property. Enter the amount of the deductions that are allocated and apportioned to gross FDDEI from all sales of intangible property.

Column (c). Services. Enter the amount of the deductions that are allocated and apportioned to gross FDDEI from all services.

Line 12. Other apportioned deductions. Enter all other apportioned deductions that relate to gross FDDEI that aren’t otherwise included on lines 11, 13, and 16. If a deduction doesn’t bear a definite relationship to a class of gross income constituting less than all of gross income, it shall ordinarily be treated as definitely related and allocable to all of the taxpayer’s gross income, including gross DEI and gross FDDEI, except where otherwise directed in the regulations.