An exchanging shareholder
(3) Income inclusion(i) Inclusion of all earnings and profits amount. An exchanging shareholder shall include in income as a deemed dividend the all earnings and profits amount with respect to its stock in the foreign acquired corporation. For the consequences of the deemed dividend, see 1.367(b)-2(e). Notwithstanding 1.367(b)-2(e), however, a deemed dividend from the foreign acquired corporation to an exchanging foreign corporate shareholder shall not qualify for the exception from foreign personal holding company income provided by section 954(c)(3)(A)(i), although it may qualify for the look-through treatment provided by section 904(d)(3) if the requirements of that section are met with respect to the deemed dividend. (ii) Examples. The following examples illustrate the rules of paragraph (b)(3)(i) of this section: (4) Reserved. For further guidance concerning section 367(b) exchanges occurring before February 23, 2001, see 1.367(b)-3T(b)(4).