Page:United States Statutes at Large Volume 111 Part 1.djvu/1002

 Ill STAT. 978 PUBLIC LAW 105-34—AUG. 5, 1997 "(1) DETERMINATION USING VALUE.— The determination under subsection (a)(2) shall be made on the basis of the value of the assets of a foreign corporation if— "(A) such corporation is a publicly traded corporation for the taxable year, or "(B) paragraph (2) does not apply to such corporation for the taxable year. "(2) DETERMINATION USING ADJUSTED BASES. — The determination under subsection (a)(2) shall be based on the adjusted bases (as determined for the purposes of computing earnings and profits) of the assets of a foreign corporation if such corporation is not described in paragraph (1)(A) and such corporation— "(A) is a controlled foreign corporation, or "(B) elects the application of this paragraph. An election under subparagraph (B), once made, may be revoked only with the consent of the Secretary. "(3) PUBLICLY TRADED CORPORATION. —For purposes of this subsection, a foreign corporation shall be treated as a publicly traded corporation if the stock in the corporation is regularly traded on— "(A) a national securities exchange which is registered with the Securities and Exchange Commission or the national market system established pursuant to section llA of the Securities and Exchange Act of 1934, or "(B) any exchange or other market which the Secretary determines has rules adequate to carry out the purposes of this subsection.", (b) CONFORMING AMENDMENTS.— Section 1297(a), as redesignated by section 1122, is amended— (1) by striking "(by value)" and inserting "(as determined in accordance with subsection (e))", and (2) by striking the last two sentences. 26 USC 532 note. SEC. 1124. EFFECTIVE DATE. The amendments made by this subtitle shall apply to— (1) taxable years of United States persons beginning after December 31, 1997, and (2) taxable years of foreign corporations ending with or within such taxable years of United States persons. Subtitle D—Repeal of Excise Tax on Transfers to Foreign Entities SEC. 1131. REPEAL OF EXCISE TAX ON TRANSFERS TO FOREIGN ENTI- TIES; RECOGNITION OF GAIN ON CERTAIN TRANSFERS TO FOREIGN TRUSTS AND ESTATES. (a) REPEAL OF EXCISE TAX. —Chapter 5 (relating to transfers to avoid income tax) is hereby repealed. (b) RECOGNITION OF GAIN ON CERTAIN TRANSFERS TO FOREIGN TRUSTS AND ESTATES.— Subpart F of part I of subchapter J of chapter 1 is amended by adding at the end the following new section:

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