Interest and research costs are kept off foreign source tested income
To provide for reconciliation pursuant to title II of H. Con. Res. 14, section 70311, Sec. 70311.
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Interest and research costs are kept off foreign source tested income
The document says “shall”Who acts: Secretary of the TreasuryHow: statuteSec. 70311 in the PDF
What the document says
“the taxpayer's taxable income from sources without the United States shall be determined by allocating and apportioning--”
The section adds a new paragraph (5) to section 904(b) of the Internal Revenue Code of 1986. Solely for applying the foreign tax credit limit to the amounts in subsection (d)(1)(A), foreign source taxable income is worked out by charging to that income the deduction under section 250(a)(1)(B) and any deduction under section 164(a)(3) for taxes on those amounts, charging no interest expense or research and experimental expenditures to it, and charging any other deduction to it only where directly allocable. Anything that would otherwise have gone against that income goes against United States source income instead.
What the document actually says
“the taxpayer's taxable income from sources without the United States shall be determined by allocating and apportioning--”
That sentence, in plain words
Foreign source income is worked out in a set way. The list that follows says which costs go against it.
What this is about
Interest and research costs are kept off it. Other costs go against it only if tied to it. What is left goes against home income.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Provide for reconciliation pursuant to title II of H. Con. Res. 14, Public Law 119-21, sec. 70311, 139 Stat. 202 (2025). https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm
This page
“Interest and research costs are kept off foreign source tested income,” Provide for reconciliation pursuant to title II of H. Con. Res. 14, section 70311, Sec. 70311. Read the Mandate, https://readthemandate.org/pl-119-21/proposal/sec70311-allocation/ (retrieved August 26, 2026).
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