Page:United States Statutes at Large Volume 98 Part 1.djvu/716

 98 STAT. 668

PUBLIC LAW 98-369—JULY 18, 1984 before the exchange referred to in paragraph (1), satisfies the stock ownership requirements of subsection (a)(2) with respect to the foreign corporation." (b) EUMINATION OF DoUBLE TAXATION OF EARNINGS AND PROFITS OF CERTAIN FOREIGN CORPORATIONS.—

26 USC 959.

(1) Section 959 (relating to exclusion from gross income of previously taxed earnings and profits) is amended by adding at the end thereof the following new subsection: "(e) COORDINATION WITH AMOUNTS PREVIOUSLY TAXED UNDER SECTION 1248.—For purposes of this section and section 960(b), any

Ante, p. 667.

Supra.

26 USC 1248.

26 USC 1248 note. 26 USC 959 note.

amount included in the gross income of any person as a dividend by reason of subsection (a) or (f) of section 1248 shall be treated as an amount included in the gross income of such person under section 951(a)(1)(A)." (2) Section 1248 is amended by adding at the end thereof the following new subsection: "(j) CROSS REFERENCE.— "For provision excluding amounts previously taxed under this section from gross income when subsequently distributed, see section 959(e)." (c) CLARIFICATION OF SECTION 1248(c)(2)(D).—Subparagraph (D) of

section 1248(c)(2) (relating to earnings and profits of subsidiaries of foreign corporations) is amended by striking out "section 958(a)(2)" and inserting in lieu thereof "section 958(a)". (d) EFFECTIVE DATES.— (1) SUBSECTION (a).—The

amendment made by subsection (a) • shall apply to exchanges after the date of the enactment of this Act in taxable years ending after such date. (2) SUBSECTIONS (b) AND (c).—Except as provided in paragraph (3), the amendments made by subsections (b) and (c) shall apply with respect to transactions to which subsection (a) or (f) of section 1248 of the Internal Revenue Code of 1954 applies occurring after the date of the enactment of this Act.

26 USC 959 note.

(3) ELECTION OF EARUER DATE FOR CERTAIN TRANSACTIONS.—

.«t.-r laa r)3U?;:

(A) IN GENERAL.—If the appropriate election is made under subparagraph (B), the amendments made by subsection (b) shall apply with respect to transactions to which s.r?

subsection (a) or (f) of section 1248 of such Code applies

occurring after October 9, 1975. (B) ELECTION.—

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(i) Subparagraph (A) shall apply with respect to transactions to which subsection (a) of section 1248 of such Code applies if the foreign corporation described in such subsection (or its successor in interest) so elects. (ii) Subparagraph (A) shall apply with respect to transactions to which subsection (f) of section 1248 of such Code applies if the domestic corporation described in section 1248(f)(1) of such Code (or its successor) so elects. (iii) Any election under clause (i) or (ii) shall be made not later than 180 days after the date of the enactment of this Act and shall be made in such manner as the Secretary of the Treasury or his delegate shall prescribe.

SEC. 134. DEFINITION OF FOREIGN INVESTMENT COMPANY.

26 USC 1246.

(a) GENERAL RULE.—Paragraph (2) of section 1246(b) (defining foreign investment company) is amended to read as follows:

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