,i  #aac? ,,congress  #b;d ,session  ,h4
 ,r4 #eddc  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,septemb] #aj1 #bjad  
,mr4 ,pocan introduc$ ! foll[+ bill2 :i*
 0 ref]r$ to ! ,committee on ,ways &    
,means  ,a ,,bill  ,to am5d ! ,int]nal  
,rev5ue ,code ( #aihf to end tax        
def]rals on pr(its accumulat$ (f%ore &  
to t]m9ate ! def]ral ( active income (  
controll$ =eign corporations4  #a4 ,%ort
 title ,?is ,act may be cit$ z ! ,putt+ 
,am]ica ,fir/ ,corporate ,tax ,act4  #b4
 ,inclusion 9 subp>t ,f income (        
inve/m5ts by controll$ =eign            
corporations ) respect to memb]s ( =eign
 gr\p :i* includes ,unit$ ,/ates        
%>ehold]  7a7 ,9 g5]al ,section         
#ief7;a77#a77;,a7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ to read z foll[s3
  7,a7 su* %>ehold]'s pro rata %>e ( !  
av]age (--  7i7 ! am\nts ( ,unit$ ,/ates
 prop]ty1 &  7ii7 9 ! case ( a controll$
 =eign corporation :i* is a memb] ( an  
exp&$ affiliat$ gr\p ! common p>5t ( :i*
 is n a ,unit$ ,/ates p]son1 ! am\nt (  

=eign gr\p prop]ty1  held 7directly or  
indirectly7 by ! controll$ =eign        
corporation z ( ! close ( ea* qu>t] (   
su* taxable ye>1 ov]  4  7b7 ,=eign gr\p
 prop]ty ,section #ief ( su* ,code is   
am5d$ by r$esignat+ subsections 7d7 &   
7e7 z subsections 7e7 & 7f71            
respectively1 & by ins]t+ aft]          
subsection 7c7 ! foll[+ new subsection3 
7d7 ,=eign gr\p prop]ty2 exp&$ affiliat$
 gr\p ,= purposes ( ?is section--  7#a7 
,=eign gr\p prop]ty  7,a7 ,9 g5]al ,!   
t]m =eign gr\p prop]ty means any /ock or
 obligation ( any =eign p]son :i* is n a
 controll$ =eign corporation4  7,b7     
,exceptions ,su* t]m %all n include--   
7i7 ! /ock or obligation ( any entity if
 less ?an #be p]c5t ( ! total comb9$    
vot+ p[] ( su* entity1 imm$iately aft] !
 acquisition ( any /ock 9 su* entity by 
! controll$ =eign corporation1 is own$  
7directly or indirectly7 by ! common    
p>5t ref]r$ to 9 subsection             
7a77#a77;,a77ii71 &  7ii7 prop]ty       
describ$ 9 subp>agraph 7,c71 7,i71 7,j71

 or 7,k7 ( subsection 7c77#b71 appli$ by
 sub/itut+ =eign p]son = ,unit$ ,/ates  
p]son 9 su* subp>agraphs 7,c7 & 7,j74   
7#b7 ,exp&$ affiliat$ gr\p ,! t]m exp&$ 
affiliat$ gr\p means an affiliat$ gr\p z
 def9$ 9 section #aejd7;a71 det]m9$--   
7,a7 by sub/itut+ m ?an #ej p]c5t = at  
lea/ #hj p]c5t ea* place x appe>s1 &    
7,b7 )\t reg>d to p>agraphs 7#b7 & 7#c7 
( section #aejd7;b74  ,a p>tn]%ip or any
 o!r entity 7o!r ?an a corporation7 %all
 be treat$ z a memb] ( an exp&$         
affiliat$ gr\p if su* entity controls 7z
 det]m9$ "u section #ied7;d77#c771 or is
 controll$ by 7z s det]m9$71 memb]s (   
su* gr\p 7includ+ any entity treat$ z a 
memb] ( su* gr\p by reason ( ?is        
s5t5ce74  7#c7 ,application to          
non-corporate entities ,9 ! case ( any  
entity :i* is n a corporation--  7,a7   
any ref]5ce 9 ?is subsection to /ock    
%all be treat$ z a ref]5ce to any equity
 or pr(its int]e/ 9 su* entity1 &  7,b7 
except z o!rwise provid$ by ! ,secret>y1
 p>agraph 7#a77;,b77i7 %all be appli$ by

 sub/itut+ #be p]c5t 7by value7 ( !     
b5eficial int]e/s 9 su* entity = #be    
p]c5t ( ! total comb9$ vot+ p[] ( su*   
entity4  4  7c7 ,application ( rules =  
pl$ges & gu>antees ,section #ief7;e7 (  
su* ,code1 z s r$esignat$1 is am5d$ to  
read z foll[s3  7e7 ,pl$ges & gu>antees 
,= purposes ( subsection 7a71 a         
controll$ =eign corporation %all1 "u    
regulations prescrib$ by ! ,secret>y1 be
 consid]$ z hold+--  7#a7 an obligation 
( a ,unit$ ,/ates p]son if su* controll$
 =eign corporation is a pl$gor or       
gu>antor ( su* obligation1 &  7#b7 an   
obligation ( a =eign p]son if su*       
controll$ =eign corporation or1 to !    
ext5t provid$ "u su* regulations1 any   
,unit$ ,/ates %>ehold] ( su* controll$  
=eign corporation1 is a pl$gor or       
gu>antor ( su* obligation4  4  7d7      
,application ( limitation on am\nt (    
=eign taxes deem$ paid ) respect to     
section #ief inclusions ,not)/&+ section
 #bad7;b7 ( ,public ,law #aaa-bbf1      
section #ifj7;c7 ( ! ,int]nal ,rev5ue   

,code ( #aihf %all apply to acquisitions
 ( =eign gr\p prop]ty 7z def9$ 9        
#ief7;d7 ( su* ,code1 z am5d$ by ?is    
section7 aft] ,decemb] #ca1 #bjaj1 9    
addition to acquisitions ( ,unit$ ,/ates
 prop]ty 7z def9$ 9 section #ief7;c7 (  
su* ,code7 aft] su* date4  7e7          
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s (    
controll$ =eign corporations end+ aft] !
 date ( ! enactm5t ( ?is ,act & to      
taxable ye>s ( ,unit$ ,/ates %>ehold]s 9
 :i* or ) :i* su* taxable ye>s (        
controll$ =eign corporations end4  #c4  
,t]m9ation ( def]ral ( active income (  
controll$ =eign corporations  7a7 ,9    
g5]al ,section #ieb ( ! ,int]nal ,rev5ue
 ,code ( #aihf is am5d$ by add+ at ! end
 ! foll[+ new subsection3  7d7 ,special 
application ( subp>t  7#a7 ,9 g5]al ,=  
taxable ye>s beg9n+ aft] ,decemb] #ca1  
#bjad1 not)/&+ any o!r provision ( ?is  
subp>t1 ! t]m subp>t ,f income means1 9 
! case ( any controll$ =eign            
corporation1 ! income ( su* corporation 

d]iv$ f any =eign c\ntry4  7#b7         
,applicable rules ,rules simil> to !    
rules "u ! la/ s5t5ce ( subsection 7a7 &
 subsection 7d7 %all apply to ?is       
subsection4  4  7b7 ,effective date ,!  
am5dm5t made by subsection 7a7 %all     
apply to taxable ye>s beg9n+ aft]       
,decemb] #ca1 #bjad4