Page:United States Statutes at Large Volume 102 Part 4.djvu/529

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3499

"(A) G A I N FROM SALE OF CERTAIN STOCK OR INTANGIBLES.—

Any gain— "(i) which is from the sale of stock in a foreign corporation or an intangible (as defined in subsection (d)(2)) and which would otherwise be sourced in the United States under this section, "(ii) which, under a treaty obligation of the United States (applied without regard to this section), would be sourced outside the United States, and "(iii) with respect to which the taxpayer chooses the benefits of this subsection. "(B) GAIN FROM UQUIDATION IN POSSESSION.—Any gain which is derived from the receipt of any distribution in liquidation of a corporation— "(i) which is organized in a possession of the United States, and "(ii) more than 50 percent of the gross income of which during the 3-taxable year period ending with the close of the taxable year immediately preceding the taxable year in whicn the distribution is received is from the active conduct of a trade or business in such possession." (9) Subparagraph (A) of section 865(e)(l) of the 1986 Code is amended by striking out "outside the United States" the first place it appears and inserting in lieu thereof "in a foreign country". (10) Subparagraph (B) of section 864(c)(4) of the 1986 Code is amended— (A) by striking out "(including any gain or loss realized on the sale or exchange of such property)" in clause (i), and (B) by striking out ", or gain or loss from the sale or exchange of stock or notes, bonds, or other evidences of indebtedness" in clause (ii). (11) Clause (i) of section 865(g)(l)(A) of the 1986 Cbde is Aliens. amended to read as follows— "(i) any individual who— "(I) is a United States citizen or a resident alien and does not have a tax home (as defined in section 911(d)(3)) in a foreign country, or "(II) is a nonresident Edien and has a tax home (as so defined) in the United States, and". (12) Paragraph (2) of section 865(d) of the 1986 Code is amended by inserting "franchise," after "trade brand,". (e) AMENDMENTS RELATED TO SECTION 1212 OF THE REFORM ACT.—

(I)(A) Paragraph (3) of section 883(c) of the 1986 Code is amended to read as follows: "(3) SPECIAL RULES FOR PUBLICLY TRADED CORPORATIONS.—

"(A) EXCEPTION.—Paragraph (1) shall not apply to any corporation which is organized in a foreign country meeting the requirements of paragraph (1) or (2) of subsection (a) (as the case may be) and the stock of which is primarily and regularly traded on an established securities market in such foreign country, another foreign country meeting the requirements of such paragraph, or the United States. (B) TREATMENT OF STOCK OWNED BY PUBLICLY TRADED

CORPORATION.—Any stock in another corporation which is owned (directly or indirectly) by a corporation meeting the

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