Page:United States Statutes at Large Volume 100 Part 3.djvu/791

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2599

"(B) QUAUriED FOREIGN CORPORATION.—FOF purpOSeS o f

subparagraph (A), the term 'qualified foreign corporation' means any foreign corporation if less than 10 percent of— "(i) the total voting power of the stock of such corporation, and h^ f "(ii) the total value of the stock of such corporation, ^ is owned or treated as owned (within the meaning of section 958) by 1 or more United States persons. ~i«: "(4) DETERMINATION OF INCOME SOURCE, ETC.—The determinant tion as to whether income is derived from sources within the with the conduct of a trade or business within the Virgin
 * Virgin Islands or the United States or is effectively connected
 * Islands or the United States shall be made under regulations

prescribed by the Secretary." (3) Section 934A (relating to income tax rates on Virgin Islands source income) is hereby repealed. (4) Subparagraph (B) of section 28(d)(3) is amended to read as, follows: "(B) SPECIAL LIMITATION FOR CORPORATIONS TO WHICH SECTION 936 APPLIES.—No credit shall be allowed under this

section with respect to any clinical testing conducted by a corporation to which an election under section 936 applies." n. (5) Clause (vii) of section 48(a)(2)(B) is amended by striking out "or which is entitled to the benefits of section 9340t>)" and by striking out ", 933, or 934(c)" and inserting in lieu thereof "or 933". (6) Clause (i) of section 338(h)(6)(B) is amended by striking out "a corporation described in section 934(b),". (7) Subparagraph (B) of section 864(d)(5) is amended to read as follows: "(B) SPECIAL RULES FOR POSSESSIONS.—An amount treated d as interest under paragraph (1) shall not be treated as ac income described in subparagraph (A) or (B) of section 936(a)(l) unless such amount is from sources within a ,J possession of the United States (determined after the application of paragraph (1))." (8) The table of sections for subpart D of part III of subchapter N of chapter 1 is amended by striking out the item relating to section 934A.

PART III—COVER OVER OF INCOME TAXES SEC. 1276. COVER OVER OF INCOME TAXES.

(a) IN GENERAL.—Section 7654 (relating to coordination of United States and Guam individual income taxes) is amended to read as follows: "SEC. 7654. COORDINATION OF UNITED STATES AND CERTAIN POSSESSION INDIVIDUAL INCOME TAXES.

"(a) GENERAL RULE.—The net collection of taxes imposed by chapter 1 for each taxable year with respect to an individual to which section 931 or 932(c) applies shall be covered into the Treasury of the specified possession of which such individual is a bona fide resident. "OD) DEFINITION AND SPECIAL RULE.—For purposes of this section— "(1) NET COLLECTIONS.—In determining net collections for a taxable year, an appropriate adjustment shall be made for

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