Page:United States Statutes at Large Volume 102 Part 4.djvu/538

 102 STAT. 3508

Regulations.

26 USC 953 note.

PUBLIC LAW 100-647—NOV. 10, 1988 "(I) only related person insurance income were taken into account, "(II) stock owned (within the meaning of section 958(a)) by United States shareholders on the last day of the taxable year were the only stock in the foreign corporation, and "(III) only distributions received by United States shareholders were taken into account under subparagraph (B) of such paragraph (2), or "(ii) the amount which would be determined under paragraph (2) of section 951(a) if the entire earnings and profits of the foreign corporation for the taxable year were subpart F income. "(B) COORDINATION WITH OTHER PROVISIONS.—The Secretary shall prescribe regulations providing for such modifications to the provisions of this subpart as may be necessary or appropriate by reason of subparagraph (A)." (3)(A) Paragraph (2) of section 953(c) of the 1986 Code is amended by striking out "with respect to which the primary insured is" and inserting in lieu thereof "with respect to which the person (directly or indirectly) insured is". (B) Subparagraph (A) of section 953(c)(3) of the 1986 Code is amended— (i) by striking out "persons who are the primary insured" and inserting in lieu thereof "persons who are (directly or indirectly) insured", and (ii) by striking out "to any such primary insured" and inserting in lieu thereof "to any such person. (C) The amendments made by this paragraph to the extent such amendments add the phrase "(directly or indirectly)" shall apply only to taxable years beginning after December 31, 1987. (4)(A) Subsection (c) of section 953 of the 1986 Code (as amended by paragraph (2)) is amended by redesignating paragraph (6) as paragraph (7) and by inserting after paragraph (5) the following new paragraph: "(6) RELATED PERSON.—For purposes of this subsection— "(A) IN GENERAL.—Except as provided in subparagraph (B), the term 'related person' has the meaning given such term by section 954(d)(3). "(B) TREATMENT OF CERTAIN LIABILITY INSURANCE POU-

26 USC 952 note.

ciES.—In the case of any policy of insurance covering liability arising from services performed as a director, officer, or employee of a corporation or as a partner or employee of a partnership, the person performing such services and the entity for which such services are performed shall be treated as related persons." (B) Paragraphs (2) and (3)(A) of section 953(c) of the 1986 Code are each amended by striking out "(within the meeming of section 954(d)(3))". (5) Paragraph (2) of section 953(c) of the 1986 Code is amended by striking out "insurance income attributable" and inserting in lieu thereof "insurance income (within the meaning of subsection (a)) attributable". (6) For purposes of applying section 952(c)(l)(A) of the 1986 Code, the earnings and profits of any corporation shall be determined without regard to any increase in earnings and profits under section 1023(e)(3)(C) of the Reform Act.

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