(a) In general. For each separate category described in § 1.904–5(a)(4)(v), the total credit for foreign income taxes (as defined in § 1.901–2(a)) paid or accrued (including those deemed to have been paid or accrued other than
by reason of section 904(c)) to any foreign country (as defined in § 1.901–2(g)) does not exceed that proportion of the tax against which such credit is taken which
the taxpayer's taxable income from foreign sources (but not in excess of the taxpayer's
entire taxable income) in such separate category bears to the taxpayer's entire taxable
income for the same taxable year.
(b) Special computation of taxable income. For purposes of computing the limitation under paragraph (a) of this section, the
taxable income in the case of an individual, estate, or trust is computed without
any deduction for personal exemptions under section 151 or 642(b).
(c) Joint return. In the case of spouses making a joint return, the applicable limitation prescribed
by section 904(a) on the credit for taxes paid or accrued to foreign countries and possessions of the
United States is applied with respect to the aggregate taxable income in each separate
category from sources without the United States, and the aggregate taxable income
from all sources, of the spouses.
(d) Consolidated group. For rules relating to the computation of the foreign tax credit limitation for a
consolidated group, see § 1.1502–4.
(e) Applicability dates. This section applies to taxable years that both begin after December 31, 2017, and
end on or after December 4, 2018.
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