Page:United States Statutes at Large Volume 111 Part 1.djvu/987

 PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 963 TITLE XI—SIMPLIFICATION AND OTHER FOREIGN-RELATED PROVISIONS Subtitle A—General Provisions SEC. 1101. CERTAIN INDIVIDUALS EXEMPT FROM FOREIGN TAX CREDIT LIMITATION. (a) GENERAL RULE.— Section 904 (relating to limitations on foreign tax credit) is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection: "( j) CERTAIN INDIVIDUALS EXEMPT.— "(1) IN GENERAL. —In the case of an individual to whom this subsection applies for any taxable year— "(A) the limitation of subsection (a) shall not apply, "(B) no taxes paid or accrued by the individual during such taxable year may be deemed paid or accrued under subsection (c) in any other taxable year, and "(C) no taxes paid or accrued by the individual during any other taxable year may be deemed paid or accrued under subsection (c) in such taxable year. "(2) INDIVIDUALS TO WHOM SUBSECTION APPLIES.— T h is subsection shall apply to an individual for giny taxable year if— "(A) the entire amount of such individual's gross income for the taxable year from sources without the United States consists of qualified passive income, "(B) the amount of the creditable foreign taxes paid or accrued by the individual during the taxable year does not exceed $300 ($600 in the case of a joint return), and "(C) such individual elects to have this subsection apply for the taxable year. "(3) DEFINITIONS.— For purposes of this subsection— "(A) QUALIFIED PASSIVE INCOME.— The term 'qualified passive income' means any item of gross income if—- "(i) such item of income is passive income (as defined in subsection (d)(2)(A) without regard to clause (iii) thereof), and "(ii) such item of income is shown on a payee statement furnished to the individual. "(B) CREDITABLE FOREIGN TAXES.— The term 'creditable foreign taxes' means any taxes for which a credit is allowable under section 901; except that such term shall not include any tax unless such tax is shown on a payee statement fiimished to such individual. "(C) PAYEE STATEMENT.—The term 'payee statement' has the meaning given to such term by section 6724(d)(2). "(D) ESTATES AND TRUSTS NOT ELIGIBLE.— T his subsection shall not apply to any estate or trust.". (b) EFFECTIVE DATE.—The amendment made by subsection (a) 26 USC 904 note, shall apply to taxable years beginning after December 31, 1997. SEC. 1102. EXCHANGE RATE USED IN TRANSLATING FOREIGN TAXES. (a) ACCRUED TAXES TRANSLATED BY USING AVERAGE RATE FOR YEAR TO WHICH TAXES RELATE.—

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