Page:United States Statutes at Large Volume 121.djvu/2497

 121 STAT. 2476

26 USC 355.

dkrause on GSDDPC44 with PUBLAW

Applicability. 26 USC 355 note.

VerDate Aug 31 2005

07:12 Jan 26, 2009

PUBLIC LAW 110–172—DEC. 29, 2007

which under section 952(c) may reduce the subpart F income of the payor or another controlled foreign corporation.’’. (b) AMENDMENTS RELATED TO SECTION 202 OF THE ACT.— (1) Subparagraph (A) of section 355(b)(2) is amended to read as follows: ‘‘(A) it is engaged in the active conduct of a trade or business,’’. (2) Paragraph (3) of section 355(b) is amended to read as follows: ‘‘(3) SPECIAL RULES FOR DETERMINING ACTIVE CONDUCT IN THE CASE OF AFFILIATED GROUPS.— ‘‘(A) IN GENERAL.—For purposes of determining whether a corporation meets the requirements of paragraph (2)(A), all members of such corporation’s separate affiliated group shall be treated as one corporation. ‘‘(B) SEPARATE AFFILIATED GROUP.—For purposes of this paragraph, the term ‘separate affiliated group’ means, with respect to any corporation, the affiliated group which would be determined under section 1504(a) if such corporation were the common parent and section 1504(b) did not apply. ‘‘(C) TREATMENT OF TRADE OR BUSINESS CONDUCTED BY ACQUIRED MEMBER.—If a corporation became a member of a separate affiliated group as a result of one or more transactions in which gain or loss was recognized in whole or in part, any trade or business conducted by such corporation (at the time that such corporation became such a member) shall be treated for purposes of paragraph (2) as acquired in a transaction in which gain or loss was recognized in whole or in part. ‘‘(D) REGULATIONS.—The Secretary shall prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which provide for the proper application of subparagraphs (B), (C), and (D) of paragraph (2), and modify the application of subsection (a)(3)(B), in connection with the application of this paragraph.’’. (3) The Internal Revenue Code of 1986 shall be applied and administered as if the amendments made by section 202 of the Tax Increase Prevention and Reconciliation Act of 2005 and by section 410 of division A of the Tax Relief and Health Care Act of 2006 had never been enacted. (c) AMENDMENT RELATED TO SECTION 515 OF THE ACT.—Subsection (f) of section 911 is amended to read as follows: ‘‘(f) DETERMINATION OF TAX LIABILITY.— ‘‘(1) IN GENERAL.—If, for any taxable year, any amount is excluded from gross income of a taxpayer under subsection (a), then, notwithstanding sections 1 and 55— ‘‘(A) if such taxpayer has taxable income for such taxable year, the tax imposed by section 1 for such taxable year shall be equal to the excess (if any) of— ‘‘(i) the tax which would be imposed by section 1 for such taxable year if the taxpayer’s taxable income were increased by the amount excluded under subsection (a) for such taxable year, over

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