Page:United States Statutes at Large Volume 100 Part 3.djvu/716

 100 STAT. 2524

PUBLIC LAW 99-514—OCT. 22, 1986 corporation in which the taxpayer is a United States share" holder shall not be treated as income in a separate category. "(B) SUBPART F INCLUSIONS.—Any amount included in gross income under section 951(a)(1)(A) shall be treated as, income in a separate category to the extent the amount so " included is attributable to income in such category. "(C) INTEREST, RENTS, AND ROYALTIES.—Any interest, rent, or royalty which is received or accrued from a controlled foreign corporation in which the taxpayer is a United States shareholder shall be treated as income in a separate J, category to the extent it is properly allocable (under regulations prescribed by the Secretary) to income of the controlled foreign corporation in such category. "(D) DIVIDENDS.—Any dividend paid out of the earnings and profits of any controlled foreign corporation in which the taxpayer is a United States shareholder shall be treated as income in a separate category in proportion to the ratio of— "(i) the portion of the earnings and profits attributable to income in such category, to "(ii) the total amount of earnings and profits.

"(E) LOOK-THRU APPLIES ONLY WHERE SUBPART F APPLIES.—

If a controlled foreign corporation meets the requirements of section 954(b)(3)(A) (relating to de minimis rule) for any taxable year, for purposes of this paragraph, none of its income for such taxable year shall be treated as income in a separate category. Solely for purposes of applying subparagraph (D), income (other than high withholding tax interest and dividends from a noncontrolled section 902 corporation) of a controlled foreign corporation shall not be treated as income in a separate category if the requirements of section 954(b)(4) are met with respect to such income. "(F) SEPARATE CATEGORY.—For purposes of this paragraph, the term 'separate category' means any category of income described in subparagraph (A), (B), (C), (D), or (E) of paragraph (1). "(G) DIVIDEND.—For purposes of this paragraph, the term 'dividend' includes any amount included in gross income in section 951(a)(1)(B). Any amount included in gross income under section 78 to the extent attributable to amounts included in gross income in section 951(a)(1)(A) shall not be treated as a dividend but shall be treated as included in gross income under section 951(a)(1)(A). "(4) CONTROLLED FOREIGN CORPORATION; UNITED STATES SHARE-

^ HOLDER.—For purposes of this subsection— "(A) CONTROLLED FOREIGN CORPORATION.—The term 'controlled foreign corporation' has the meaning given such -: term by section 957 (taking into account section 953(c)). "(B) UNITED STATES SHAREHOLDER.—The term 'United States shareholder' has the meaning given such term by section 951(b) (taking into account section 953(c)). "(5) REGULATIONS.—The Secretary shall prescribe such regu*' lations as may be necessary or appropriate for the purposes of this subsection, including regulations—

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