Page:United States Statutes at Large Volume 92 Part 3.djvu/281

 PUBLIC LAW 95-600—NOV. 6, 1978

92 STAT. 2913

(ii) by inserting before the period at the end thereof the following: ", or during which section 957(c) applied to such corporation". (C) EFFECTIVE DATES.—The amendment made by subpara- 26 USC 901 graph (A) shall apply as if included in section 901(g) of the note. Internal Revenue Code of 1954 as added by section 1051(d)(2) 26 USC 901. of the Tax Reform Act of 1976. The amendments made by subparagraph (B) shall apply to distributions made after the date of the enactment of this Act in taxable years ending after such date. (2) FOREIGN TAX CREDIT ADJUSTMENTS FOR CAPITAL GAINS.—

26 USC 904

(A) IN GENERAL.—Paragraph (2) of section 904(b) (relating to treatment of capital gains for purposes of the foreign tax credit limitation) is amended by striking out "For purposes of subsection (a)—" and inserting in lieu thereof "For purposes of this section—". (B) SOURCE RULE.—Subparagraph (C) of section 904(b)(3) is amended by striking out "For purposes of this paragraph, there" and inserting in lieu thereof There". (C) SOURCE RULE FOR LIQUIDATIONS OF CERTAIN FOREIGN

CORPORATIONS.—Paragraph (3) of section 904(b) (relating to source rules for gain from the sale of certain personal property) is amended by redesignating subparagraph (D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph: "(D) GAIN FROM LIQUIDATION OF CERTAIN FOREIGN CORPORA-

TIONS.—Subparagraph (C) shall not apply with respect to a distribution in liquidation of a foreign corporation to which part II of subchapter C applies if such corporation derived less than 50 percent of its gross income from sources within / the United States for the 3-year period ending with the close of such corporation's taxable year immediately preceding the year during which the distribution occurred." (D) EFFECTIVE DATE.—The amendments made by this para- 26 USC 904 graph shall apply to taxable years beginning after Decem- note. ber 31, 1975. (3) TREATMENT OF CERTAIN CAPITAL LOSS CARRYOVERS AND CARRYBACKS FOR PURPOSES OF THE LIMITATION ON CREDIT FOR FOREIGN TAXES.—

(A) IN GENERAL.—Clause (iii) of section 904(b)(2)(A) (relating to treatment of capital gains of corporations for purposes of the foreign tax credit limitation) is amended by striking out "any net capital loss" and inserting in lieu thereof "for purposes of determining taxable income from sources without the United States, any net capital loss (and any amount which is a short-term capital loss under section 1212(a))". (B) EFFECTIVE DATE.—The amendment made by subparagraph (A) shall apply to taxable years beginning ^ t e r December 31, 1975.

26 USC 904.

26 USC 1212. 26 USC 904 note.

(4) TREATMENT OF CAPITAL LOSS CARRYOVERS FOR PURPOSES OF FOREIGN LOSS RECAPTURE.—

(A) IN GENERAL.—Subparagraph (a) of section 904(f)(2) 26 USC 904. (defining overall foreign loss) is amended by striking out "or any capital loss carrybacks and carryovers to such year 26 USC 1212. under section 1212". (B) FOREIGN OIL RELATED LOSSES.—Subparagraph (A) of

section 904(f)(4) (relating to determination of foreign oil 26 USC 904.

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