Page:United States Statutes at Large Volume 103 Part 3.djvu/290

 103 STAT. 2358 PUBLIC LAW 101-239—DEC. 19, 1989 26 USC 904 note. (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to taxable years beginning after July 10, 1989. SEC. 7403. INFORMATION WITH RESPECT TO CERTAIN FOREIGN-OWNED CORPORATIONS. (a) 25-PERCENT FOREIGN-OWNED CORPORATIONS REQUIRED TO REPORT.— (1) Peu-agraph (2) of section 6038A(a) is amended to read as follows: "(2) is 25-percent foreign-owned,". (2) Subsection (c) of section 6038A is amended to read as follows: "(c) DEFINITIONS.—For purposes of this section— " (1) 25-PERCENT FOREIGN-OWNED. —A Corporation is 25-percent foreign-owned if at least 25 percent of— "(A) the total voting power of all classes of stock of such corporation entitled to vote, or (B) the total value of all classes of stock of such corpora- tion, is owned at any time during the taxable 3rear by 1 foreign person (hereinarter in this section referred to as a '25-percent foreign shareholder'). "(2) RELATED PARTY.— The term 'related party' means— "(A) any 25-percent foreign shareholder of the reporting corporation, '(B) any person who is related (within the meaning of section 267(b) or 707(b)(l)) to the reporting corporation or to i i" * a 25-percent foreign shareholder of the reporting corpora- ' ^ s1tion,and "(C) any other person who is related (within the meaning of section 482) to the reporting corporation. "(4) FOREIGN PERSON.— The term 'foreign person' means any person who is not a United States person. For purposes of the preceding sentence, the term 'United States person' has the meaning given to such term by section 7701(a)(30), except that any individual who is a citizen of any possession of the United States (but not otherwise a citizen of the United States) and who ' is not a resident of the United States shall not be treated as a United States person. fs "(5) RECORDS.—The term 'records' includes any books, papers, or other data. "(6) SECTION 318 TO APPLY.— Section 318 shall apply for pur- poses of paragraphs (1) and (2), except that— "(A) '10 percent' shall be substituted for '50 percent' in section 318(a)(2)(C), and " (B) subparagraphs (A), (B), and (C) of section 318(a)(3) shall not be applied so as to consider a United States person as owning stock which is owned by a person who is not a United States person." Regulations. (b) U.S. RECORDKEEPING REQUIREMENTS. —Subsection (a) of section 6038A is amended by inserting before the period at the end thereof the following: "and such corporation shall maintain (in the location, in the manner, and to the extent prescribed in regulations) such records as may be appropriate to determine the correct treatment of transactions with related parties as the Secretary shall by regula- tions prescribe (or shall cause another person to so maintain such records)".

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