New Sec. 960 'properly attributable to' standard raises questions for Sec. 956 inclusions

Foreign Income & Taxpayers TAX CUTS AND JOBS ACT As amended by P.L. 115-97, the law known as the Tax Cuts and Jobs Act (TCJA), and effective for tax years of foreign corporations beginning after 2017, Sec. 960 adopts a new "properly attributable to" standard to determine the amount of foreign taxes deemed paid by U.S. shareholders of controlled foreign corporations (CFCs) with respect to certain income inclusions from CFCs, including amounts included in the U.S. shareholder's gross income under Sec. 951(a).Sec. 960(a) now provides that U.S. corporate shareholders that include "any item of income under section 951(a)(1)" with respect to any CFC shall be deemed to have paid "so much of such foreign corporation's foreign income taxes as are properly attributable to such item of income.[...]as a threshold matter, Sec. 960(a) provides a basis for deemed-paid credits with respect to inclusions under Secs. 951(a)(1)(A) (Subpart F inclusions) and (B) (Sec. 956 inclusions).[...]in Example 1, if all CFCl's $30 of foreign income taxes was paid in prior years, then no foreign income taxes would be deemed paid by USP by reason of the $100 Sec. 951(a)(1)(B) inclusion from CFCl, even if the entire inclusion was measured by applicable earnings generated in prior years.Sec. 1.904-6(a) first appeared in the JCT report accompanying the House version of the TCJA, which as mentioned above would have repealed Sec. 956 for corporate U.S. shareholders (similar to the Senate version).[...]it is unclear whether the Regs.