The temporary C.F.C. “look-thru rule” under Code § 954(c)(6) expired for calendar year taxpayers at the end of 2009. Under this rule, dividends, interest, rents, and royalties received by one C.F.C. from a related C.F.C. are not treated as foreign personal holding company income to the extent attributable or properly allocable to income of the payor that is neither subpart F income nor treated as U.S. effectively connected income.
Under the Tax Relief, Unemployment Insurance Reauthorization, And Job Creation Act Of 2010, which recently passed the Senate and the House of Representatives, and is expected to be signed by the President, Code § 954(c)(6) is extended for an additional two years (2010 and 2011 for calendar year taxpayers).