Executive summaryOn 21 August 2020, the United States (US) Treasury Department (Treasury) and the Internal Revenue Service (IRS) released final regulations under Internal Revenue Code1 Section 245A (TD 9909) providing anti-abuse rules for “extraordinary dispositions” and “extraordinary reductions.” These regulations finalize proposed regulations and replace temporary regulations that were issued in June 2019. (For discussion of the proposed and temporary regulations, see EY Global Tax Alert, US temporary and proposed DRD regulations reflect GILTI-centric view of international tax rules enacted under TCJA, dated 21 June 2019).The final regulations are substantially similar to the proposed and temporary regulations, with a limited number of generally...