Court of Federal Claims strikes down a GILTI rule on disqualified basis

Keysight Technologies claimed roughly $500 million a year in amortization deductions for 2020 through 2022. Treasury Regulation section 1.951A-2(c)(5) allocated deductions attributable to disqualified basis solely to residual gross income of a controlled foreign corporation, which kept those deductions from reducing global intangible low-taxed income. The Court of Federal Claims granted Keysight partial summary judgment on July 2. Judge Tapp held that section 7805(a) did not authorize the rule, and that the deductions were properly allocable to gross tested income. The opinion applies Loper Bright Enterprises v. Raimondo to a Tax Cuts and Jobs Act regulation. The docket is No. 25-137. No free public URL for the slip opinion was found, so no primary document is linked here. Reported by Ed Zollars at Current Federal Tax Developments.