Page:United States Statutes at Large Volume 100 Part 3.djvu/730

 100 STAT. 2538

PUBLIC LAW 99-514—OCT. 22, 1986 "(c) COORDINATION WITH OTHER PROVISIONS.—Any income taxable

under this section shall not be taxable under section 871, 881, or 882." (2) CLERICAL AMENDMENT.—The table of subparts for part II of subchapter N is amended by striking out the item relating to subpart C and inserting in lieu thereof the following: "Subpart C. Tax on gross transportation income. "Subpart D. Miscellaneous provisions." • '« • i. (c) LIMITATION ON EXCLUSION OF TRANSPORTATION INCOME.—

(1) Subsection (b) of section 872 (relating to exclusions) is amended by striking out paragraphs (1) and (2) and inserting in lieu thereof the following: "(1) SHIPS OPERATED BY CERTAIN NONRESIDENTS.—Gross income derived by an individual resident of a foreign country from the operation of a ship or ships if such foreign country grants an equivalent exemption to citizens of the United States and to corporations organized in the United States. "(2) AIRCRAFT OPERATED BY CERTAIN NONRESIDENTS.—Gross

income derived by an individual resident of a foreign country from the operation of aircraft if such foreign country grants an equivalent exemption to citizens of the United States and to corporations organized in the United States." (2) Section 872(b) is amended by adding at the end thereof the following new paragraphs: "(5) CERTAIN RENTAL INCOME.—Income to which paragraphs (1) and (2) apply shall include income which is derived from the rental on a full or bareboat basis of a ship or ships or aircraft, as the case may be. "(6) APPLICATION TO DIFFERENT TYPES OF TRANSPORTATION.—

The Secretary may provide that this subsection be applied separately with respect to income from different types of transportation." (3) Subsection (a) of section 883 (relating to exclusions from gross income) is amended by striking out paragraphs (1) and (2) and by inserting in lieu thereof the following: "(1) SHIPS OPERATED BY CERTAIN FOREIGN CORPORATIONS.—

Gross income derived by a corporation organized in a country from the operation of a ship or ships if such country grants an equivalent exemption to citizens United States and to corporations organized in the States.

foreign foreign of the United

"(2) AIRCRAFT OPERATED BY CERTAIN FOREIGN CORPORATIONS.—

Gross income derived by a corporation organized in a foreign country from the operation of aircraft if such foreign country grants an equivalent exemption to citizens of the United States and to corporations organized in the United States." (4) Section 883(a) is amended by adding at the end thereof the following new paragraph: "(4) SPECIAL RULES.—The rules of paragraphs (5) and (6) of section 872(b) shall apply for purposes of this subsection." (5) Section 883 is amended by adding at the end thereof the following new subsection: "(c) TREATMENT OF CERTAIN FOREIGN CORPORATIONS.—

"(1) IN GENERAL.—Paragraphs (1) and (2) of subsection (a) shall not apply to any foreign corporation if 50 percent or more of the value of the stock of such corporation is owned by

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