Page:United States Statutes at Large Volume 103 Part 3.djvu/287

 PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2355 under section 401(a) of such Code when such method is used, that contributions to the account are deductible, or acknowledging that the account would not adversely affect the qualified status of the plan (contingent on all phases of the particular plan being approved). Subtitle D—Foreign Provisions SEC. 7401. TAXABLE YEAR OF CERTAIN FOREIGN CORPORATIONS. (a) GENERAL RULE. —Subpart D of part II of subchapter N of chapter 1 (relating to miscellaneous provisions) is amended by adding at the end thereof the following new section: "SEC. 898. TAXABLE YEAR OF CERTAIN FOREIGN CORPORATIONS. "(a) GENERAL RULE. —For purposes of this title, the tsucable year of any specified foreign corporation shall be the required year deter- mined under subsection (c). "(b) SPECIFIED FOREIGN CORPORATION. — For purposes of this sec- tion— "(1) IN GENERAL. —The term 'specified foreign corporation' means any foreign corporation— ( "(A) which is— "(i) treated as a controlled foreign corporation for any purpose under subpart F of part III of this sub- ..? chapter, or "(ii) a foreign personal holding company (as defined in section 552), and "(B) with respect to which the ownership requirements of paragraph (2) are met. "(2) OWNERSHIP REQUIREMENTS.— ' "(A) IN GENERAL. — The ownership requirements of this paragraph are met with respect to any foreign corporation if a United States shareholder owns, on each testing day, more than 50 percent of— "(i) the total voting power of all classes of stock of t. such corporation entitled to vote, or " "(ii) the total value of all classes of stock of such corporation. "(B) OWNERSHIP.— For purposes of subparagraph (A), the rules of subsections (a) and (b) of section 958 and sections 551(f) and 554, whichever are applicable, shall apply in determining ownership. "(3) UNITED STATES SHAREHOLDER. — "(A) IN GENERAL. — The term 'United States shareholder' has the meaning given to such term by section 951(b), except that, in the case of a foreign corporation having related person insurance income (as defined in section 953(c)(2)), the Secretary may treat any person as a United States shareholder for purposes of this section if such person is treated as a United States shareholder under section 953(c)(l). "(B) FOREIGN PERSONAL HOLDING COMPANIES. — In the case '^ of any foreign personal holding company (as defined in section 552) which is not a specified foreign corporation by reason of paragraph (IXAXi), the term 'United States share-

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