The IRS has removed Cuba from the so-called “Code Sec. 901 blacklist” of foreign countries from which U.S. taxpayers may not be entitled to a foreign tax credit. Removal of Cuba from this list also means that U.S. taxpayers are now entitled to the benefit of a foreign tax credit to any income attributable to Cuba. In addition, income earned in Cuba through a controlled foreign corporation will no longer be Subpart F income barred from deferral treatment under Code Sec. 952(a)(5).
The restrictions are lifted as of December 21, 2015, based upon certification by the Secretary of State that Cuba is no longer a country described in Code Sec. 901(j)(2)(A). That section applies to any country with whom the U.S. does not maintain diplomatic relations or that is designated by the State Department as a country that supports international terrorism.