Page:United States Statutes at Large Volume 85.djvu/576

 546

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PUBLIC LAW 92-178-DEC. 10, 1971

[85 STAT.

For purposes of this paragraph, assets which are qualified export assets of a D I S C (or would be qualified export assets if owned by a D I S C) shall not be taken into account. Amounts described in this paragraph (other than in subparagraphs (B) (ii) and (v)) shall be taken into account only to the extent they are attributable to taxable years beginning after December 31, 1971. "(3) ACTUAL FOREIGN INVESTMENT,—The term 'actual foreign investment' by domestic members of a controlled group means the sum of— " (A) contributions to capital of foreign members of the group by domestic members of the group after December 31, 1971, " (B) the outstanding amount of stock or debt obligations of foreign members of such group (other than normal trade indebtedness) issued after December 31, 1971, to domestic members of such group, "(C) amounts transferred by domestic members of the group after I>ecember 31, 1971, to foreign branches of such members, and " (D) one-half the earnings and profits of foreign members of such group and foreign branches of domestic members of such group for taxable years beginning after December 31, 1971. A s used i n t h i s subsection, the term 'domestic m e m b e r ' means a domestic corporation which is a m e m b e r of a controlled g r o u p ( a s defined in section 9 9 3 (a)(3)), and the term 'foreign member' means a foreign corporation which is a member of such a controlled group. "(4) UNCOMMITTED TRANSITIONAL FUNDS.—The uncommitted transitional funds of the group shall be an amount equal to the sum of— (A) the excess of— (i) the amount of stock or debt obligations of domestic members of such group outstanding on December 31, 1971, and issued on or after January 1, 1968, to persons other than United States persons or any members of such group, but only to the extent the taxpayer establishes that such amount constitutes a long-term borrowing for purposes of the foreign direct investment program, over (ii) the net amount of actual foreign investment by domestic members of such group during the period that such stock or debt obligations have been outstanding; and " (B) the amount of liquid assets to the extent not included in subparagraph (A) held by foreign members of such group and foreign branches of domestic members of such group on October 31, 1971, in excess of their reasonable working capital needs on such date. For purposes of this paragraph, the term 'liquid assets' means money, bank deposits (not including time deposits), and indebtedness of 2 years or less to maturity on the date of acquisition; and the actual foreign investment shall be determined under paragraph (3) without regard to the date in subparagraph (A) of such paragraph and without regard to subparagraph (D) of such paragraph. "(5) SPECIAL RULE.—Under regulations prescribed by the Secretary or his delegate the determinations under this subsection shall be made on a cumulative basis with proper adjustments for amounts previously taken into account.

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