IRS explains how FDII rules carve out gains from IP and asset sales
IRS Notice 2025-78 (Dec. 05, 2025)
In IRS Notice 2025-78, the IRS explains how a new statutory change affects deduction eligible income (DEI), which is the base number a domestic corporation uses to calculate its FDII deduction under §250.
DEI is simply the corporation’s gross income after removing specific categories of income that Congress says don’t count for FDII, and after subtracting the deductions tied to what remains.
The new rule adds another category that must be carved out of DEI: income and gains from the sale or disposition of intangibles and depreciable, amortizable, or depletable property.
Treasury plans to issue regulations defining exactly which property qualifies, how sales and deemed sales are treated, and how anti-abuse rules apply. The exclusion applies to transactions after June 16, 2025.
Scope of the Notice
The notice describes how the exclusion applies.
A sale or other disposition includes actual and deemed sales, deemed dispositions, and transactions subject to §367(d). It follows general tax princ…
