Page:United States Statutes at Large Volume 85.djvu/557

 85 STAT. ]

PUBLIC LAW 92-178-DEC. 10, 1971

527

(b) NONRESIDENT ALIENS.—Section 871(a)(1)(C) (relating to tax \l ^^^'Jon noneffectively connected income of nonresident alien individuals) is amended to read as follows: " (C) in the case of— " (i) bonds or other evidences of indebtedness issued after September 28, 1965, and before April 1, 1972, amounts which under section 1232(a)(2)(B) are con- 83 Stat. 609. sidered as gain from the sale or exchange of property which is not a capital asset, and, in the case of corporate obligations issued after May 27, 1969, and before April 1, 1972, amounts which would be so considered but for the fact the obligations were issued after May 27, 1969, "(ii) bonds or other evidences of indebtedness issued after March 31, 1972, and payable more than 6 months from the date of original issue (without regard to the period held by the taxpayer), amounts which under section 1232(a)(2)(B) would be considered as gain from the sale or exchange of property which is not a capital asset but for the fact such obligations were issued after May 27, 1969, and "(iii) the payment of interest on an obligation described in clause (ii), an amount equal to the original issue discount (but not in excess of such interest less the tax imposed by subparagraph (A) thereon) accrued on such obligation since the last payment of interest thereon, and". (c) FOREIGN CORPORATIONS.—Section 881(a)(3) (relating to income ^o s*^'* ^ss;;. of foreign corporations) is amended to read as follows: "(3) in the case of— " (A) bonds or other evidences of indebtedness issued after September 28, 1965, and before April 1, 1972, amounts which under section 1232(a)(2)(B) are considered as gain from the sale or exchange of property which is not a capital asset, and, in the case of corporate obligations issued after May 27, 1969, and before April 1, 1972, amounts which would be so considered but for the fact the obligations were issued after May 27, 1969, " (B) bonds or other evidences of indebtedness issued after March 31, 1972, and payable more than 6 months from the date of original issue (without regard to the period held by the taxpayer), amounts which under section 1232(a)(2)(B) would be considered as gain from the sale or exchange of property which is not a capital asset but for the fact such obligations were issued after May 27, 1969, and " (C) the payment of interest on an obligation described in subparagraph (B), an amount equal to the original issue discount (but not in excess of such interest less the tax imposed by paragraph (1) thereon) accrued on such obligation since the last payment of interest thereon, and". (d)

WITHHOLDING

ON NONRESIDENT ALIENS.—Section

1441(c) so^stttf^^ssa^^''

(relating to withholding of tax on nonresident aliens) is amended by adding at the end thereof the following new paragraph: "(8) ORIGINAL ISSUE DISCOUNT.—The Secretary or his delegate

may prescribe such regulations as may be necessary for the deduction and withholding of the tax on original issue discount subject to tax under section 871(a)(1)(C) including rules for the deduction and withholding of the tax on original issue discount from payments of interest."

'^"^'•^•

�