Foreign country
(7) Foreign country includes any U.S. territory (as defined in 1.1502-1(l)). (8) Consolidated group has the meaning provided in 1.1502-1(h). (9) Domestic owner means (i) A domestic corporation (including a dual resident corporation) that has one or more separate units or interests in a transparent entity; and (ii) In the case of a combined separate unit, a domestic corporation (including a dual resident corporation) that has one or more individual separate units that are treated as part of the combined separate unit under paragraph (b)(4)(ii) of this section. (10) Affiliated dual resident corporation and affiliated domestic owner mean a dual resident corporation and a domestic owner, respectively, that is a member of a consolidated group. (11) Unaffiliated dual resident corporation, unaffiliated domestic corporation, and unaffiliated domestic owner mean a dual resident corporation, domestic corporation, and domestic owner, respectively, that is not a member of a consolidated group. (12) Domestic affiliate means (i) A member of an affiliated group, without regard to the exceptions contained in section 1504(b) (other than section 1504(b)(3)) relating to includible corporations; (ii) A domestic owner; (iii) A separate unit; or (iv) An interest in a transparent entity, as defined in paragraph (b)(16) of this section. (13) Domestic use. See 1.1503(d)-2. (14) Foreign use. See 1.1503(d)-3. (15) Grantor trust means a trust, any portion of which is treated as being owned by the grantor or another person under subpart E of subchapter J of this chapter. (16) Transparent entity(i) In general. The term transparent entity means an entity described in this paragraph (b)(16) where all or a portion of its interests are owned, directly or indirectly, by a domestic corporation. An entity is described in this paragraph (b)(16) if the entity (A) Is not taxable as an association for Federal tax purposes; (B) Is not subject to income tax in a foreign country as a corporation (or otherwise at the entity level) either on its worldwide income or on a residence basis; and (C) Is not a pass-through entity under the laws of the applicable foreign country. For purposes of applying the preceding sentence, the applicable foreign country is the foreign country in which the relevant foreign branch separate unit is located, or the foreign country that subjects the relevant hybrid entity (an interest in which is a separate unit) or dual resident corporation to an income tax either on its worldwide income or on a residence basis. (ii) Example. A U.S. limited liability company (LLC) does not elect to be taxed as an association for Federal tax purposes and is not subject to income tax in a foreign country as a corporation (or otherwise at the entity level) either on its worldwide income or on a residence basis. The LLC is owned by a hybrid entity (an interest in which is a separate unit) that is the relevant hybrid entity. Provided the LLC is not treated as a pass-through entity by the applicable foreign country that subjects the relevant hybrid entity to an income tax either on its worldwide income or on a residence basis, the LLC would qualify as a transparent entity. See also 1.1503(d)-7(c) Example 26. (17) Disregarded entity means an entity that is disregarded as an entity separate from its owner, under 301.7701-1 through 301.7701-3 of this chapter, for Federal tax purposes. (18) Partnership means an entity that is classified as a partnership, under 301.7701-1 through 301.7701-3 of this chapter, for Federal tax purposes. (19) Indirectly, when used in reference to ownership, means ownership through a partnership, a disregarded entity, or a grantor trust, regardless of whether the partnership, disregarded entity, or grantor trust is a U.S. person. (20) Certification period means the period of time up to and including the fifth taxable year following the year in which the dual consolidated loss that is the subject of a domestic use agreement (as described in 1.1503(d)-6(d)(1)) was incurred.