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Federal Register / Vol. 86, No. 183 / Friday, September 24, 2021 / Rules and Regulations
B. Foreign Tax Credit Transition Rules Addressing Post-2017 NOL Carrybacks to Pre-2018 Taxable Years The foreign tax credit transition rules addressing post-2017 NOL carrybacks to pre-2018 taxable years provide guidance needed to comply with statutory changes and affect individuals and Size by business receipts
Under $500,000
%

FTC/Total Receipts
FTC/Total Receipts-Total Deductions
FTC/Business Receipts

corporations claiming foreign tax credits. Adequate data are not available at this time to certify that a substantial number of small entities would be unaffected. However, the Treasury Department and the IRS have determined that the regulations will not have a significant economic impact on domestic small business entities. Based
$500,000
under $1,000,000
%

$1,000,000
under $5,000,000
%

$5,000,000
under $10,000,000
%

on information from the Statistics of Income 2017 Corporate File, foreign tax credits as a percentage of three different tax-related measures of annual receipts see Table for variables by corporations are substantially less than the 3 to 5
percent threshold for significant economic impact.

$10,000,000
under $50,000,000
%

$50,000,000
under $100,000,000
%

$100,000,000
under $250,000,000
%

$250,000,000
or more %

0.12

0.00

0.00

0.00

0.01

0.01

0.02

0.28

0.61
0.84

0.03
0.00

0.09
0.00

0.05
0.00

0.35
0.01

0.71
0.01

1.38
0.02

9.89
0.05

Source: Statistics of Income 2017 Form 1120.

In addition, these final regulations do not impose a collection of information burden on any person, including small entities. Accordingly, it is hereby certified that the foreign tax credit transition rules addressing post-2017
NOL carrybacks to pre-2018 taxable years will not have a significant economic impact on a substantial number of small entities.
Pursuant to section 7805f of the Internal Revenue Code, the notices of proposed rulemaking preceding these final regulations were submitted to the Chief Counsel for Advocacy of the Small Business Administration for comments on their impact on small business, and no comments were received.

federalism implications and do not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

IV. Unfunded Mandates Reform Act Section 202 of the Unfunded Mandates Reform Act of 1995 requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a state, local, or tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. These regulations do not include any Federal mandate that may result in expenditures by state, local, or tribal governments, or by the private sector in excess of that threshold.

IRS Revenue Procedures, Revenue Rulings, Notices, and other guidance cited in this document are published in the Internal Revenue Bulletin and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC
20402, or by visiting the IRS website at https www.irs.gov.

V. Executive Order 13132: Federalism Executive Order 13132 entitled Federalism prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on state and local governments, and is not required by statute, or preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order.
These regulations do not have
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Drafting Information The principal authors of these regulations are Jorge M. Oben, Jeffrey L.
Parry, and Larry R. Pounders of the Office of Associate Chief Counsel International. However, other personnel from the Treasury Department and the IRS participated in their development.
Statement of Availability of IRS
Documents
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.

1.2501

b Except as otherwise provided in this paragraph b, 1.250a1 and 1.250b1 through 1.250b6 apply to taxable years beginning on or after January 1, 2021.
The last sentence in 1.250b 2e2 applies to taxable years beginning after December 31, 2017.
Par. 3. Section 1.250b2 is amended by adding a sentence at the end of paragraph e2 to read as follows:
1.250 b2 Qualified business asset investment QBAI.

e
2 For purposes of applying section 250b2B and this paragraph e, the technical amendment to section 168g to provide a recovery period of 20 years for qualified improvement property for purposes of the alternative depreciation system enacted in section 2307a of the Coronavirus Aid, Relief, and Economic Security Act, Public Law 116136 2020 is treated as enacted on December 22, 2017.

1.9042

Adoption of Amendments to the Regulations Accordingly, 26 CFR part 1 is amended as follows:
PART 1INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805.

Par. 2. Section 1.2501 is amended by revising the first sentence of paragraph b and adding a sentence at the end of the paragraph to read as follows:

Introduction.

Amended
Par. 4. Section 1.9042j1iiiD is amended by removing the language 1.904f12j5 and adding in its place the language 1.904f12j6.
Par. 5. Section 1.904f12 is amended by:
1. Removing paragraph j6;
2. Redesignating paragraph j5 as paragraph j6; and 3. Adding new paragraphs j5 and j7;
The additions read as follows:

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Transition rules.