SECTION 3. APPLICATION OF

PROPOSED § 1.965–3(b) TO CONSOLIDATED GROUPS

Proposed § 1.965–3(b) provides rules allowing a section 958(a) U.S. shareholder to disregard certain assets for purposes of determining its aggregate foreign cash position (as defined in proposed § 1.965–1(f)(8)). Proposed § 1.965–8(e) provides that all members of a consolidated group that are section 958(a) U.S. shareholders of a specified foreign corporation (as defined in proposed § 1.965– 1(f)(45)) are treated as a single section 958(a) U.S. shareholder for certain enumerated purposes that do not include proposed § 1.965–3(b). To prevent the overstatement of the aggregate foreign cash position, the final regulations will provide that all members of a consolidated group that are section 958(a) U.S. shareholders of a specified foreign corporation are also treated as a single section 958(a) U.S. shareholder for purposes of proposed § 1.965–3(b).