Page:United States Statutes at Large Volume 100 Part 3.djvu/760

 100 STAT. 2568

PUBLIC LAW 99-514—OCT. 22, 1986

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"(E) if the distributions are received in a foreign currency, determinations under this subsection shall be made ' ' ' ' in such currency and the amount of any excess distribution .K.',. determined in such currency shall be translated into dollars. "(c) DEFERRED TAX AMOUNT.—For purposes of this section— "(1) IN GENERAL.—The term 'deferred tax amount' means, with respect to any distribution or disposition to which subsection (a) applies, an amount equal to the sum of— "(A) the aggregate increases in taxes described in paragraph (2), plus "(B) the aggregate amount of interest (determined in the no manner provided under paragraph (3)) on such increases in tax. "(2) AGGREGATE INCREASES IN TAXES.—For purposes of paragraph (1)(A), the aggregate increases in taxes shall be determined by multiplying each amount allocated under subsection 1o (a)(1)(A) to any taxable year (other than any taxable year referred to in subsection (a)(1)(B)) by the highest rate of tax in effect for such taxable year under section 1 or 11, whichever applies. "(3) COMPUTATION OF INTEREST.—

"(A) IN GENERAL.—The amount of interest referred to in paragraph (1)(B) on any increase determined under paragraph (2) for any taxable year shall be determined for the period— "(i) beginning on the due date for such taxable year, "(ii) ending on the due date for the taxable year with ^.,^ or within which the distribution or disposition occurs, by using the rates and method applicable under section, 6621 for underpayments of tax for such period. "(B) DUE DATE.—For purposes of this subsection, the term 'due date' means the date prescribed by law (determined without regard to extensions) for filing the return of the tax imposed by this chapter for the taxable year. '(d) COORDINATION WITH SUBPART B.—

"(1) IN GENERAL.—This section shall not apply with respect to— "(A) any distribution paid by a passive foreign investment . company during a taxable year for which such company is a qualified electing fund, and "(B) any disposition of stock in a passive foreign investment company if such company is a qualified electing fund for each of its taxable years— "(i) which begins after December 31, 1986, and for which such company is a passive foreign investment company, and "(ii) which includes any portion of the taxpayer's holding period. "(2) ELECTION TO RECOGNIZE GAIN WHERE COMPANY BECOMES QUALIFIED ELECTING FUND.— "(A) IN GENERAL.—If^



"(i) a passive foreign investment company becomes a qualified electing fund for a taxable year which begins after December 31, 1986,

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