2. Int'l Tax Update Significant Developments in the Global Tax System - Andrew Seidler
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FDII Example<br />
Step 1: Determ<strong>in</strong>e Deduction Eligible Income (DEI)<br />
Gross <strong>in</strong>come 1,200.0<br />
Less Subpart F <strong>in</strong>come -<br />
Less GILTI <strong>in</strong>come -<br />
Less F<strong>in</strong>ancial services <strong>in</strong>come -<br />
Less Dividend received from CFC -<br />
Less Domestic oil and gas extraction <strong>in</strong>come -<br />
Less foreign branch <strong>in</strong>come -<br />
Adjusted Gross Income 1,200.0<br />
Less Allocable deductions 100.0<br />
DEI 1,100.0 A<br />
Step 2: Reduce by Rout<strong>in</strong>e Return<br />
QBAI 500.0<br />
Apply Rout<strong>in</strong>e Return Factor 10.0%<br />
Less Interest expense <strong>in</strong>cluded <strong>in</strong> allocable deductions w/o <strong>in</strong>terest <strong>in</strong>come -<br />
Rout<strong>in</strong>e Return 50.0 B<br />
Step 3: Determ<strong>in</strong>ed Deemed Intangible Income (DII)<br />
(DEI - (10% x QBAI)) 1,050.0 C = A - B
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