Page:United States Statutes at Large Volume 114 Part 4.djvu/370

 114 STAT. 2432 PUBLIC LAW 106-519—NOV. 15, 2000 then such partnership shall allocate to each partner items of income, gain, loss, and deduction (including qualifying foreign trade income) from any transaction to which this subpart applies on the basis of such separate account. "(2) SPECIAL RULES.— For purposes of this subpart, in the case of a partnership to which paragraph (1) applies— (A) any partner's interest in the partnership shall not be taken into account in determining whether such partner is a related person with respect to any other partner, and "(B) the election under section 942(a)(3) shall be made separately by each partner with respect to any transaction for which the partnership maintains separate accounts for each partner. "(g) EXCLUSION FOR PATRONS OF AGRICULTURAL AND HORTI- CULTURAL COOPERATIVES. — Any amount described in paragraph (1) or (3) of section 1385(a)— "(1) which is received by a person from an organization to which part I of subchapter T applies which is engaged in the marketing of agricultural or horticultural products, and "(2) which is allocable to qualifying foreign trade income and designated as such by the organization in a written notice mailed to its patrons during the payment period described in section 1382(d), shall be treated as qualifying foreign trade income of such person for purposes of section 114. The taxable income of the organization shall not be reduced under section 1382 by reason of any amount to which the preceding sentence applies. "(h) SPECIAL RULE FOR DISCS.—Section 114 shall not apply to any taxpayer for any taxable year if, at any time during the taxable year, the taxpayer is a member of any controlled group of corporations (as defined in section 927(d)(4), as in effect before the date of the enactment of this subsection) of which a DISC is a member.". SEC. 4. TECHNICAL AND CONFORMING AMENDMENTS. 26 USC 56. (1) The second sentence of section 56(g)(4)(B)(i) is amended by inserting before the period "or under section 114". 26 USC 275. (2) Section 275(a) is amended— (A) by striking "or" at the end of paragraph (4)(A), by striking the period at the end of paragraph (4)(B) and inserting ", or", and by adding at the end of paragraph (4) the following new subparagraph: "(C) such taxes are paid or accrued with respect to qualifying foreign trade income (as defined in section 941)."; and (B) by adding at the end the following the following new sentence: "A rule similar to the rule of section 943(d) shall apply for purposes of paragraph (4)(C).". 26 USC 864. (3) Paragraph (3) of section 864(e) is amended— (A) by striking "For purposes of" and inserting: "(A) IN GENERAL.— For purposes of"; and (B) by adding at the end the following new subparagraph: " (B) ASSETS PRODUCING EXEMPT EXTRATERRITORIAL INCOME. —For purposes of allocating and apportioning any interest expense, there shall not be taken into account

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