Page:United States Statutes at Large Volume 118.djvu/1549

 118 STAT. 1519 PUBLIC LAW 108–357—OCT. 22, 2004 ‘‘(3) NONDEDUCTIBLE CFC DIVIDENDS.—For purposes of this subsection, the term ‘nondeductible CFC dividends’ means the excess of the amount of dividends taken into account under subsection (a) over the deduction allowed under subsection (a) for such dividends. ‘‘(f) ELECTION.—The taxpayer may elect to apply this section to— ‘‘(1) the taxpayer’s last taxable year which begins before the date of the enactment of this section, or ‘‘(2) the taxpayer’s first taxable year which begins during the 1 year period beginning on such date. Such election may be made for a taxable year only if made before the due date (including extensions) for filing the return of tax for such taxable year.’’. (b) ALTERNATIVE MINIMUM TAX.—Subparagraph (C) of section 56(g)(4) is amended by inserting after clause (v) the following new clause: ‘‘(vi) SPECIAL RULE FOR CERTAIN DISTRIBUTIONS FROM CONTROLLED FOREIGN CORPORATIONS.—Clause (i) shall not apply to any deduction allowable under sec tion 965.’’. (c) CLERICAL AMENDMENT.—The table of sections for subpart F of part III of subchapter N of chapter 1 is amended by adding at the end the following new item: ‘‘Sec. 965. Temporary dividends received deduction.’’. (d) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years ending on or after the date of the enactment of this Act. SEC. 423. DELAY IN EFFECTIVE DATE OF FINAL REGULATIONS GOV ERNING EXCLUSION OF INCOME FROM INTERNATIONAL OPERATION OF SHIPS OR AIRCRAFT. Notwithstanding the provisions of Treasury regulation § 1.883– 5, the final regulations issued by the Secretary of the Treasury relating to income derived by foreign corporations from the inter national operation of ships or aircraft (Treasury regulations § 1.883– 1 through § 1.883–5) shall apply to taxable years of a foreign cor poration seeking qualified foreign corporation status beginning after September 24, 2004. SEC. 424. STUDY OF EARNINGS STRIPPING PROVISIONS. (a) IN GENERAL.—The Secretary of the Treasury or the Sec retary’s delegate shall conduct a study of the effectiveness of the provisions of the Internal Revenue Code of 1986 applicable to earnings stripping, including a study of— (1) the effectiveness of section 163(j) of such Code in pre venting the shifting of income outside the United States, (2) whether any deficiencies of such provisions place United States based businesses at a competitive disadvantage relative to foreign based businesses, (3) the impact of earnings stripping activities on the United States tax base, (4) whether laws of foreign countries facilitate stripping of earnings out of the United States, and (5) whether changes to the earning stripping rules would affect jobs in the United States. 26 USC 56 note.

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