Page:United States Statutes at Large Volume 100 Part 3.djvu/719

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2527

(II) the foreign withholding tax rate applicable to interest payable with respect to such loan on November 16, 1985. (G) INTEREST RATE ADJUSTMENT.—

(i) IN GENERAL.—Except as provided in clause (ii), the applicable interest rate adjustment shall equal the ratio of the weighted average 6-month London Interbank Offered Rate (LIBOR) for the taxable year in question to LIBOR on November 15, 1985. (ii) PosT-1989 QUALIFIED LOANS.—The applicable interest rate adjustment for post-1989 qualified loans shall be equal to the ratio of LIBOR on the last day of the taxpayer's 1st taxable year beginning after December 31, 1988 to LIBOR on November 15, 1985. (H) QUALIFIED LOAN.—For purposes of this subsection, the term "qualified loan" means any loan made by the taxpayer to any of the following countries or any resident thereof for use in such country: (i) Argentina. (xvii) Morocco. (ii) Bolivia. (xviii) Mozambique. (iii) Brazil. (xix) Niger. (iv) Chile. (xx) Nigeria. (v) Colombia. (xxi) Panama. (vi) Costa Rica. (xxii) Peru. (vii) The Dominican (xxiii) The Philippines. Republic. (xxiv) Romania. (viii) Ecuador. (xxv) Senegal. (ix) Guyana. (xxvi) Sierra Leone. (x) Honduras. (xxvii) The Sudan. (xi) The Ivory Coast. (xviii) Togo. (xii) Jamaica. (xxix) Uruguay, (xiii) Liberia. (xxx) Venezuela, (xiv) Madagascar. (xxxi) Yugoslavia. (xv) Malawi. (xxxii) Zaire, (xvi) Mexico. (xxxiii) Zambia. (I) No BENEFIT FOR INCREASED WITHHOLDING TAXES.—No

benefit shall be allowable by reason of this paragraph for any foreign withholding tax imposed on interest payable with respect to any qualified loan to the extent the rate of such tax exceeds the foreign withholding tax rate applicable to interest payable with respect to such loan on November 16, 1985. (3) SPECIAL RULE FOR TAXPAYER WITH OVERALL FOREIGN LOSS.—

(A) IN GENERAL.—If a taxpayer incorporated on June 20, 1928, the principal headquarters of which is in Minneapolis, Minnesota, sustained an overall foreign loss (as defined in section 904(f)(2) of the Internal Revenue Code of 1954) in taxable years beginning before January 1, 1986, in connection with 2 separate trades or businesses which the taxpayer had, during 1985, substantially disposed of in tax-free transactions pursuant to section 355 of such Code, then an amount, not to exceed $40,000,000 of foreign source income, which, but for this paragraph, would not be treated as overall limitation income, shall be so treated.

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