Page:United States Statutes at Large Volume 102 Part 4.djvu/530

 102 STAT. 3500

PUBLIC LAW 100-647—NOV. 10, 1988 requirements of subparagraph (A) shall be treated as owned by individuals who are residents of the foreign country in which the corporation meeting the requirements of subparagraph (A) is organized." (B) Paragraph (1) of section 883(c) of the 1986 Code is amended— (i) by striking out "Paragraphs (1) and (2) of subsection (a)" and inserting in lieu thereof "Paragraph (1) or (2) of subsection (a) (as the case may be)", and (ii) by stri^ng out "such paragraphs (1) and (2)" and inserting in lieu thereof "such paragraph". (2)(A) Paragraphs (1) and (2) of section 883(a) of the 1986 Code are each amended by striking out "to citizens of the United States and" (B) Paragraphs (1) and (2) of section 872(b) of the 1986 Code are each amended by striking out "to citizens of the United States and to corporations organized in the United States" and inserting in lieu thereof "to individual residents of the United States". (3)(A) The section heading for section 863 of the 1986 Code is amended to read as follows:

"SEC 863. SPECIAL RULES FOR DETERMINING SOURCE.'*

(B) The table of sections for part I of subchapter N of chapter 1 of the 1986 Code is amended by striking out the item relating to section 863 and inserting in lieu thereof the following: "Sec. 863. Special rules for determining source."

(4) Subsection (c) of section 862 is hereby repealed. (5) Paragraphs (1) and (2) of section 872(b) of the 1986 Code and paragraphs (1) and (2) of section 883(a) of the 1986 Oxle are each amended by striking out "operation" and inserting in lieu thereof "international operation". (6) Paragraph (1) of section 887(b) of the 1986 Code is amended— (A) by striking out "under section 863(c)" and inserting in lieu thereof "under section 863(c)(2)", and (B) by adding at the end thereof the following new sentence: "To the extent provided in regulations, such term does not include any income of a kind to which an exemption under paragraph (1) or (2) of section 883(a) would not apply." (f) AMENDBIIENT RELATED TO SECTION 1213 OF THE REFORM ACT.—

Paragraph (2) of section 863(e) of the 1986 Code is amended by striling out "foreign country" each place it appears and inserting in lieu thereof "foreign country (or possession of the United States)". (g) AMENDMENTS RELATED TO SECTION 1214 OF THE REFORM ACT.—

26 USC 861 note.

dXA) Paragraph (1) of section 1214(d) of the Reform Act is amended to read as follows: "(1) IN GENERAL.—The amendments made by this section shall apply to payments made in a taxable year of the payor beginning after December 31, 1986." (B) A taxpayer may elect not to have the amendment made by subparagraph (A) apply and to have section 1214(d)(l) of the Reform Act apply as in effect before such amendment. Such election shall be made at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe.

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