,,ii #aac? ,,congress #a/ ,session ,s4 #bgg ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,febru>y #aa1 #bjac ,mr4 ,:iteh\se 7= himself1 ,mr4 ,h>k91 ,mr4 ,s&]s1 & ,mr4 ,lev97 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to replace ! ,budget ,control ,act seque/] by elim9at+ tax loopholes1 & = o!r purposes4 #a4 ,%ort title2 table ( cont5ts 7a7 ,%ort title ,?is ,act may be cit$ z ! ,job ,pres]vation & ,economic ,c]ta9ty ,act ( #bjac4 7b7 ,table ( cont5ts ,! table ( cont5ts ( ?is ,act is z foll[s3 ,sec4 #a4 ,%ort title2 table ( cont5ts4 ,,title ,i--,elim9ation ( seque/ration ,sec4 #aja4 ,discretion>y sp5d+ limits4 ,,title ,,ii--,elim9ation ( ,tax ,loopholes = ,high-,income ,taxpay]s ,sec4 #bja4 ,m9imum tax = high-income e>n]s4 ,sec4 #bjb4 ,requir+ high-income pr(essionals to pay _! payroll taxes4 ,sec4 #bjc4 ,elim9ation ( private jet giveaway4 ,sec4 #bjd4 ,limitation on itemiz$ d$uctions to #bh-p]c5t rate bracket4 ,,title ,,iii--,elim9ation ( tax loopholes = (f%or+ manufactur]s ,sec4 #cja4 ,end+ tax breaks = (f%or+ manufactur]s4 ,,title ,,iv--,elim9ation ( tax loopholes = oil & gas companies ,sec4 #dja4 ,modifications ( =eign tax cr$it rules applicable to major integrat$ oil companies :i* are dual capacity taxpay]s4 ,sec4 #djb4 ,limitation on section #aii d$uction attributable to oil1 natural gas1 or prim>y products !re(4 ,sec4 #djc4 ,limitation on d$uction = intangible drill+ & developm5t co/s4 ,sec4 #djd4 ,limitation on p]c5tage depletion all[ance = oil & gas wells4 ,sec4 #dje4 ,limitation on d$uction = t]ti>y injectants4 ,sec4 #djf4 ,repeal ( out] ,cont95tal ,%elf deep wat] & deep gas royalty relief4 ,,title ,v--,end+ ,int]national ,tax ,abuses ,sec4 #eja4 ,allocation ( exp5ses & taxes on basis ( repatriation ( =eign income4 ,sec4 #ejb4 ,excess income f transf]s ( intangibles to l[-tax$ affiliates treat$ z subp>t ,f income4 ,sec4 #ejc4 ,limitations on income %ift+ ?r\gh intangible prop]ty transf]s4 ,sec4 #ejd4 ,limitation on e>n+s /ripp+ by expatriat$ entities4 ,sec4 #eje4 ,modifications ( =eign tax cr$it rules applicable to dual capacity taxpay]s4 ,sec4 #ejf4 ,sep>ate basket treatm5t taxes paid on =eign oil & gas income4 ,,title ,,vi--,f9ancial crisis responsibility fee ,sec4 #fja4 ,def9itions & special rules4 ,sec4 #fjb4 ,f9ancial crisis responsibility fee4 ,sec4 #fjc4 ,o!r provisions4 ,,title ,,vii--,tax on trad+ transactions ,sec4 #gja4 ,transaction tax4 ,,title ,,viii--,modification ( acc\nt+ rules ,sec4 #hja4 ,repeal ( la/-91 fir/-out me?od ( inv5tory4 ,sec4 #hjb4 ,repeal ( l[] ( co/ or m>ket me?od ( inv5tory4 ,,title ,,ix--,fair treatm5t ( options ,sec4 #ija4 ,consi/5t treatm5t ( /ock options by corporations4 ,sec4 #ijb4 ,application ( executive pay d$uction limit4 ,i ,elim9ation ( seque/ration #aja4 ,discretion>y sp5d+ limits 7a7 ,9 g5]al ,"p ,c ( title ,,ii ( ! ,balanc$ ,budget & ,em]g5cy ,deficit ,control ,act ( #aihe 7#b ,u4,s4,c4 #ijj et seq47 is am5d$-- 7#a7 by /rik+ section #bea7;c7 7#b ,u4,s4,c4 #ija7;c77 & ins]t+ ! foll[+3 7c7 ,discretion>y sp5d+ limit ,z us$ 9 ?is "p1 ! t]m discretion>y sp5d+ limit means-- 7#a7 ) respect to fiscal ye> #bjab-- 7,a7 = ! security category1 #fhd1jjj1jjj1jjj 9 new budget au?ority2 & 7,b7 = ! nonsecurity category1 #cei1jjj1jjj1jjj 9 new budget au?ority2 7#b7 ) respect to fiscal ye> #bjac-- 7,a7 = ! security category1 #fhf1jjj1jjj1jjj 9 new budget au?ority2 & 7,b7 = ! nonsecurity category1 #cfa1jjj1jjj1jjj 9 new budget au?ority2 7#c7 ) respect to fiscal ye> #bjad1 = ! discretion>y category1 #a1jff1jjj1jjj1jjj 9 new budget au?ority2 7#d7 ) respect to fiscal ye> #bjae1 = ! discretion>y category1 #a1jhf1jjj1jjj1jjj 9 new budget au?ority2 7#e7 ) respect to fiscal ye> #bjaf1 = ! discretion>y category1 #a1ajg1jjj1jjj1jjj 9 new budget au?ority2 7#f7 ) respect to fiscal ye> #bjag1 = ! discretion>y category1 #a1aca1jjj1jjj1jjj 9 new budget au?ority2 7#g7 ) respect to fiscal ye> #bjah1 = ! discretion>y category1 #a1aef1jjj1jjj1jjj 9 new budget au?ority2 7#h7 ) respect to fiscal ye> #bjai1 = ! discretion>y category1 #a1ahb1jjj1jjj1jjj 9 new budget au?ority2 7#i7 ) respect to fiscal ye> #bjbj1 = ! discretion>y category1 #a1bjh1jjj1jjj1jjj 9 new budget au?ority2 & 7#aj7 ) respect to fiscal ye> #bjba1 = ! discretion>y category1 #a1bcd1jjj1jjj1jjj 9 new budget au?ority2 z adju/$ 9 /rict con=mance ) subsection 7b74 2 7#b7 by /rik+ section #bea;,a 7#b ,u4,s4,c4 #ija;a72 & 7#c7 9 ! table ( cont5ts set =? 9 section #bej7;a71 by /rik+ ! item relat+ to section #bea;,a4 7b7 ,te*nical & con=m+ am5dm5t ,section #ija7;e7 ( ! ,am]ican ,taxpay] ,relief ,act ( #bjab 7,public ,law #aab-bdj7 is repeal$4 ,,ii ,elim9ation ( ,tax ,loopholes = ,high-,income ,taxpay]s #bja4 ,m9imum tax = high-income e>n]s 7a7 ,9 g5]al ,sub*apt] ,a ( *apt] #a is am5d$ by add+ at ! end ! foll[+ new "p3 ,,viii ,fair %>e tax on high-income taxpay]s ,sec4 #ei;,b4 ,fair %>e tax4 #ei;,b4 ,fair %>e tax 7a7 ,g5]al rule 7#a7 ,phase-9 ( tax ,9 ! case ( any high-income taxpay]1 !re is h]eby impos$ = a taxable ye> 79 addition to any o!r tax impos$ by ?is subtitle7 a tax equal to ! product (-- 7,a7 ! am\nt det]m9$ "u p>agraph 7#b71 & 7,b7 a fraction 7n to exce$ #a7-- 7i7 ! num]ator ( :i* is ! excess (-- 7,i7 ! taxpay]'s adju/$ gross income1 ov] 7,,ii7 ! doll> am\nt 9 effect "u subsection 7c77#a71 & 7ii7 ! d5om9ator ( :i* is ! doll> am\nt 9 effect "u subsection 7c77#a74 7#b7 ,am\nt ( tax ,! am\nt ( tax det]m9$ "u ?is p>agraph is an am\nt equal to ! excess 7if any7 (-- 7,a7 ! t5tative fair %>e tax = ! taxable ye>1 ov] 7,b7 ! excess (-- 7i7 ! sum (-- 7,i7 ! regul> tax liability 7z def9$ 9 section #bf7;b77 = ! taxable ye>1 det]m9$ )\t reg>d to any tax liability det]m9$ "u ?is section1 7,,ii7 ! tax impos$ by section #ee = ! taxable ye>1 plus 7,,iii7 ! payroll tax = ! taxable ye>1 ov] 7ii7 ! cr$its all[able "u "p ,,iv ( sub*apt] ,a 7o!r ?an sections #bg7;a71 #ca1 & #cd74 7b7 ,t5tative fair %>e tax ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t5tative fair %>e tax = ! taxable ye> is #cj p]c5t ( ! excess (-- 7,a7 ! adju/$ gross income ( ! taxpay]1 ov] 7,b7 ! modifi$ *>itable contribution d$uction = ! taxable ye>4 7#b7 ,modifi$ *>itable contribution d$uction ,= purposes ( p>agraph 7#a7-- 7,a7 ,9 g5]al ,! modifi$ *>itable contribution d$uction = any taxable ye> is an am\nt equal to ! am\nt :i* be>s ! same ratio to ! d$uction all[able "u section #agj 7section #fdb7;c7 9 ! case ( a tru/ or e/ate7 = su* taxable ye> z-- 7i7 ! am\nt ( itemiz$ d$uctions all[able "u ! regul> tax 7z def9$ 9 section #ee7 = su* taxable ye>1 det]m9$ aft] ! application ( section #fh1 be>s to 7ii7 su* am\nt1 det]m9$ be=e ! application ( section #fh4 7,b7 ,taxpay] mu/ itemize ,9 ! case ( any individual :o does n elect to itemize d$uctions = ! taxable ye>1 ! modifi$ *>itable contribution d$uction %all be z]o4 7c7 ,high-,income taxpay] ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m high-income taxpay] means1 ) respect to any taxable ye>1 any taxpay] 7o!r ?an a corporation7 ) an adju/$ gross income = su* taxable ye> 9 excess ( #a1jjj1jjj 7#ej p]c5t ( su* am\nt 9 ! case ( a m>ri$ individual :o files a sep>ate return74 7#b7 ,inflation adju/m5t 7,a7 ,9 g5]al ,9 ! case ( a taxable ye> beg9n+ aft] #bjac1 ! #a1jjj1jjj am\nt "u p>agraph 7#a7 %all be increas$ by an am\nt equal to-- 7i7 su* doll> am\nt1 multipli$ by 7ii7 ! co/-(-liv+ adju/m5t det]m9$ "u section #a7;f77#c7 = ! cal5d> ye> 9 :i* ! taxable ye> beg9s1 det]m9$ by sub/itut+ cal5d> ye> #bjab = cal5d> ye> #aiib 9 subp>agraph 7,b7 !re(4 7,b7 ,r\nd+ ,if any am\nt z adju/$ "u subp>agraph 7,a7 is n a multiple ( #aj1jjj1 su* am\nt %all be r\nd$ to ! next l[e/ multiple ( #aj1jjj4 7d7 ,payroll tax ,= purposes ( ?is section1 ! payroll tax = any taxable ye> is an am\nt equal to ! excess (-- 7#a7 ! taxes impos$ on ! taxpay] "u sections #adja1 #adaa1 #caja1 #cbja1 & #cbaa7;a7 7to ! ext5t su* tax is attributable to ! rate ( tax 9 effect "u section #caja7 ) respect to su* taxable ye> or wages or comp5sation receiv$ dur+ su* taxable ye>1 ov] 7#b7 ! d$uction all[able "u section #afd7;f7 = su* taxable ye>4 7e7 ,special rule = e/ates & tru/s ,= purposes ( ?is section1 9 ! case ( an e/ate or tru/1 adju/$ gross income %all be comput$ 9 ! mann] describ$ 9 section #fg7;e74 7f7 ,n treat$ z tax impos$ by ?is *apt] = c]ta9 purposes ,! tax impos$ "u ?is section %all n be treat$ z tax impos$ by ?is *apt] = purposes ( det]m9+ ! am\nt ( any cr$it "u ?is *apt] 7o!r ?an ! cr$it all[$ "u section #bg7;a77 or = purposes ( section #ee4 4 7b7 ,cl]ical am5dm5t ,! table ( p>ts = sub*apt] ,a ( *apt] #a is am5d$ by add+ at ! end ! foll[+ new item3 ,"p ,,viii--,fair %>e tax on high-,income taxpay]s 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjab4 #bjb4 ,requir+ high-income pr(essionals to pay _! payroll taxes 7a7 ,9 g5]al ,section #adjb ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new subsection3 7m7 ,special rules = pr(essional s]vice bus9esses 7#a7 ,%>ehold]s provid+ s]vices to specifi$ ,s corporations 7,a7 ,9 g5]al ,9 ! case ( an applicable %>ehold] :o provides sub/antial s]vices ) respect to a pr(essional s]vice bus9ess ref]r$ to 9 subp>agraph 7,c7 ( a specifi$ ,s corporation-- 7i7 su* %>ehold] %all be treat$ z engag$ 9 ! trade or bus9ess ( su* pr(essional s]vice bus9ess ) respect to items ( income or loss describ$ 9 section #acff :i* are attributable to su* bus9ess1 & 7ii7 su* %>ehold]'s net e>n+s f self-employm5t %all include su* %>ehold]'s pro rata %>e ( su* items ( income or loss1 except t 9 comput+ su* pro rata %>e ( su* items ! exceptions provid$ 9 subsection 7a7 %all apply4 7,b7 ,treatm5t ( family memb]s ,except z o!rwise provid$ by ! ,secret>y1 ! applicable %>ehold]'s pro rata %>e ( items ref]r$ to 9 subp>agraph 7,a7 %all be increas$ by ! pro rata %>e ( su* items ( ea* memb] ( su* applicable %>ehold]'s family 7)9 ! mean+ ( section #cah7;a77#a77 :o does n provide sub/antial s]vices ) respect to su* pr(essional s]vice bus9ess4 7,c7 ,specifi$ ,s corporation ,= purposes ( ?is subsection1 ! t]m specifi$ ,s corporation means-- 7i7 any ,s corporation :i* is a p>tn] 9 a p>tn]%ip :i* is engag$ 9 a pr(essional s]vice bus9ess if sub/antially all ( ! activities ( su* ,s corporation are p]=m$ 9 connection ) su* p>tn]%ip1 & 7ii7 any o!r ,s corporation :i* is engag$ 9 a pr(essional s]vice bus9ess if #ge p]c5t or m ( ! gross income ( su* bus9ess is attributable to s]vice ( #c or few] %>ehold]s ( su* corporation4 7,d7 ,applicable %>ehold] ,= purposes ( ?is p>agraph1 ! t]m applicable %>ehold] means any %>ehold] ^: modifi$ adju/$ gross income = ! taxable ye> exce$s-- 7i7 9 ! case ( a %>ehold] mak+ a jo9t return "u section #fjac or a surviv+ sp\se 7z def9$ 9 section #b7;a771 #bej1jjj1 7ii7 9 ! case ( a m>ri$ %>ehold] 7z def9$ 9 section #ggjc7 fil+ a sep>ate return1 half ( ! doll> am\nt det]m9$ "u clause 7i71 & 7iii7 9 any o!r case1 #bjj1jjj4 7#b7 ,p>tn]s 7,a7 ,9 g5]al ,9 ! case ( any p>tn]%ip :i* is engag$ 9 a pr(essional s]vice bus9ess1 subsection 7a77#ac7 %all n apply to any applicable p>tn] :o provides sub/antial s]vices ) respect to su* pr(essional s]vice bus9ess4 7,b7 ,applicable p>tn] ,= purposes ( ?is p>agraph1 ! t]m applicable p>tn] means any p>tn] ^: modifi$ adju/$ gross income = ! taxable ye> exce$s-- 7i7 9 ! case ( a p>tn] mak+ a jo9t return "u section #fjac or a surviv+ sp\se 7z def9$ 9 section #b7;a771 #bej1jjj1 7ii7 9 ! case ( a m>ri$ p>tn] 7z def9$ 9 section #ggjc7 fil+ a sep>ate return1 half ( ! doll> am\nt det]m9$ "u clause 7i71 & 7iii7 9 any o!r case1 #bjj1jjj4 7#c7 ,pr(essional s]vice bus9ess ,= purposes ( ?is subsection1 ! t]m pr(essional s]vice bus9ess means any trade or bus9ess 7or portion !re(7 provid+ s]vices 9 ! fields ( heal?1 law1 lobby+1 eng9e]+1 ar*itecture1 acc\nt+1 actu>ial sci5ce1 p]=m+ arts1 consult+1 a?letics1 inve/m5t advice or managem5t1 or brok]age s]vices4 7#d7 ,modifi$ adju/$ gross income ,= purposes ( ?is subsection1 ! t]m modifi$ adju/$ gross income means adju/$ gross income-- 7,a7 det]m9$ )\t reg>d to any d$uction all[$ "u section #afd7;f71 & 7,b7 increas$ by ! am\nt exclud$ f gross income "u section #iaa7;a77#a74 7#e7 ,regulations ,! ,secret>y %all prescribe su* regulations z may be necess>y or appropriate to c>ry out ! purposes ( ?is subsection1 includ+ regulations :i* prev5t ! avoidance ( ! purposes ( ?is subsection ?r\gh ti]$ entities or o!rwise4 7#f7 ,cross ref]5ce ,= employm5t tax treatm5t ( wages paid to %>ehold]s ( ,s corporations1 see subtitle ,c4 4 7b7 ,con=m+ am5dm5t ,section #baa ( ! ,social ,security ,act is am5d$ by add+ at ! end ! foll[+ new subsection3 7l7 ,special rules = pr(essional s]vice bus9esses 7#a7 ,%>ehold]s provid+ s]vices to specifi$ ,s corporations 7,a7 ,9 g5]al ,9 ! case ( an applicable %>ehold] :o provides sub/antial s]vices ) respect to a pr(essional s]vice bus9ess ref]r$ to 9 subp>agraph 7,c7 ( a specifi$ ,s corporation-- 7i7 su* %>ehold] %all be treat$ z engag$ 9 ! trade or bus9ess ( su* pr(essional s]vice bus9ess ) respect to items ( income or loss describ$ 9 section #acff ( ! ,int]nal ,rev5ue ,code ( #aihf :i* are attributable to su* bus9ess1 & 7ii7 su* %>ehold]'s net e>n+s f self-employm5t %all include su* %>ehold]'s pro rata %>e ( su* items ( income or loss1 except t 9 comput+ su* pro rata %>e ( su* items ! exceptions provid$ 9 subsection 7a7 %all apply4 7,b7 ,treatm5t ( family memb]s ,except z o!rwise provid$ by ! ,secret>y ( ! ,treasury1 ! applicable %>ehold]'s pro rata %>e ( items ref]r$ to 9 subp>agraph 7,a7 %all be increas$ by ! pro rata %>e ( su* items ( ea* memb] ( su* applicable %>ehold]'s family 7)9 ! mean+ ( section #cah7;a77#a7 ( ! ,int]nal ,rev5ue ,code ( #aihf7 :o does n provide sub/antial s]vices ) respect to su* pr(essional s]vice bus9ess4 7,c7 ,specifi$ ,s corporation ,= purposes ( ?is subsection1 ! t]m specifi$ ,s corporation means-- 7i7 any ,s corporation 7z def9$ 9 section #acfa7;a7 ( ! ,int]nal ,rev5ue ,code ( #aihf7 :i* is a p>tn] 9 a p>tn]%ip :i* is engag$ 9 a pr(essional s]vice bus9ess if sub/antially all ( ! activities ( su* ,s corporation are p]=m$ 9 connection ) su* p>tn]%ip1 & 7ii7 any o!r ,s corporation 7z s def9$7 :i* is engag$ 9 a pr(essional s]vice bus9ess if #ge p]c5t or m ( ! gross income ( su* bus9ess is attributable to s]vice ( #c or few] %>ehold]s ( su* corporation4 7,d7 ,applicable %>ehold] ,= purposes ( ?is p>agraph1 ! t]m applicable %>ehold] means any %>ehold] ^: modifi$ adju/$ gross income = ! taxable ye> exce$s-- 7i7 9 ! case ( a %>ehold] mak+ a jo9t return "u section #fjac ( ! ,int]nal ,rev5ue ,code ( #aihf or a surviv+ sp\se 7z def9$ 9 section #b7;a7 ( su* ,code71 #bej1jjj1 7ii7 9 ! case ( a m>ri$ %>ehold] 7z def9$ 9 section #ggjc ( su* ,code7 fil+ a sep>ate return1 half ( ! doll> am\nt det]m9$ "u clause 7i71 & 7iii7 9 any o!r case1 #bjj1jjj4 7#b7 ,p>tn]s 7,a7 ,9 g5]al ,9 ! case ( any p>tn]%ip :i* is engag$ 9 a pr(essional s]vice bus9ess1 subsection 7a77#ab7 %all n apply to any applicable p>tn] :o provides sub/antial s]vices ) respect to su* pr(essional s]vice bus9ess4 7,b7 ,applicable p>tn] ,= purposes ( ?is p>agraph1 ! t]m applicable p>tn] means any p>tn] ^: modifi$ adju/$ gross income = ! taxable ye> exce$s-- 7i7 9 ! case ( a p>tn] mak+ a jo9t return "u section #fjac ( ! ,int]nal ,rev5ue ,code ( #aihf or a surviv+ sp\se 7z def9$ 9 section #b7;a7 ( su* ,code71 #bej1jjj1 7ii7 9 ! case ( a m>ri$ p>tn] 7z def9$ 9 section #ggjc ( su* ,code7 fil+ a sep>ate return1 half ( ! doll> am\nt det]m9$ "u clause 7i71 & 7iii7 9 any o!r case1 #bjj1jjj4 7#c7 ,pr(essional s]vice bus9ess ,= purposes ( ?is subsection1 ! t]m pr(essional s]vice bus9ess means any trade or bus9ess 7or portion !re(7 provid+ s]vices 9 ! fields ( heal?1 law1 lobby+1 eng9e]+1 ar*itecture1 acc\nt+1 actu>ial sci5ce1 p]=m+ arts1 consult+1 a?letics1 inve/m5t advice or managem5t1 or brok]age s]vices4 7#d7 ,modifi$ adju/$ gross income ,= purposes ( ?is subsection1 ! t]m modifi$ adju/$ gross income means adju/$ gross income z det]m9$ "u section #fb ( ! ,int]nal ,rev5ue ,code ( #aihf-- 7,a7 det]m9$ )\t reg>d to any d$uction all[$ "u section #afd7;f7 ( su* ,code1 & 7,b7 increas$ by ! am\nt exclud$ f gross income "u section #iaa7;a77#a7 ( su* ,code4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjab4 #bjc4 ,elim9ation ( private jet giveaway 7a7 ,9 g5]al ,subp>agraph 7,c7 ( section #afh7;e77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by /rik+ & at ! end ( clause 7iv71 by r$esignat+ clause 7v7 z clause 7vi71 & by ins]t+ aft] clause 7iv7 ! foll[+ new clause3 7v7 any g5]al aviation aircraft1 & 4 7b7 ,class ,life ,p>agraph 7#c7 ( section #afh7;g7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] subp>agraph 7,e7 ! foll[+ new subp>agraph3 7,f7 ,g5]al aviation aircraft ,9 ! case ( any g5]al aviation aircraft1 ! recov]y p]iod us$ = purposes ( p>agraph 7#b7 %all be #ab ye>s4 4 7c7 ,g5]al aviation aircraft ,subsection 7i7 ( section #afh ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] p>agraph 7#ai7 ! foll[+ new p>agraph3 7#bj7 ,g5]al aviation aircraft ,! t]m g5]al aviation aircraft means any airplane or helicopt] 7includ+ airframes & eng9es7 n us$ 9 comm]cial or contract c>ry+ ( pass5g]s or freight1 b :i* prim>ily engages 9 ! c>ry+ ( pass5g]s4 4 7d7 ,effective date ,?is section %all be effective = prop]ty plac$ 9 s]vice aft] ,decemb] #ca1 #bjab4 #bjd4 ,limitation on itemiz$ d$uctions to #bh-p]c5t rate bracket 7a7 ,9 g5]al ,! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] section #fh ! foll[+ new section3 #fh;,a4 ,b5efit ( itemiz$ d$uctions limit$ to #bh-p]c5t rate bracket 7a7 ,9 g5]al ,9 ! case ( an individual ^: adju/$ gross income exce$s #bjj1jjj 7#bej1jjj 9 ! case ( a jo9t return71 ! am\nt ( ! itemiz$ d$uctions o!rwise all[able = ! taxable ye> %all be r$uc$ by an am\nt necess>y to increase ! am\nt ( regul> tax liability ( ! taxpay] to an am\nt t w\ld be impos$ if su* d$uctions r$uc$ ! regul> tax liability by n m ?an ! am\nt su* d$uctions w\ld r$uce ! tax impos$ by section #a on taxable income )9 ! #bh-p]c5t bracket am\nt4 7b7 ,regul> tax liability ,= purposes ( ?is section1 ! t]m regul> tax liability has ! mean+ giv5 su* t]m by section #bf7;b74 7c7 ,coord9ation ) section #fh ,?is section %all apply aft] ! application ( section #fh4 4 7b7 ,alt]native m9imum tax 7#a7 ,9 g5]al ,subsection 7b7 ( section #ee is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#e7 ,coord9ation ) section #fh;,a ,9 ! case ( an individual1 = purposes ( p>agraph 7#b71 alt]native m9imum taxable income %all be det]m9$ by r$uc+ ! am\nt ( any itemiz$ d$uctions o!rwise all[$ 9 det]m9+ alt]native m9imum taxable income by an am\nt :i* be>s ! same ratio to ! am\nt by :i* ! itemiz$ d$uctions ( ! taxpay] 7 r$uc$ = ! taxable ye> "u section #fh;,a z-- 7,a7 ! am\nt ( itemiz$ d$uctions o!rwise all[$ 9 det]m9+ ! alt]native m9imum taxable income = ! taxable ye>1 be>s to 7,b7 ! aggregate am\nt ( itemiz$ d$uctions ( ! taxpay] = ! taxable ye> 7det]m9$ )\t reg>d to section #fh;,a74 4 7#b7 ,con=m+ am5dm5t ,p>agraph 7#a7 ( section #ef7;b7 is am5d$ by add+ at ! end ! foll[+ new subp>agraph3 7,g7 ,section #fh;,a n applicable ,section #fh;,a %all n apply4 4 7c7 ,cl]ical am5dm5t ,! table ( sections = "p ,i ( sub*apt] ,b ( *apt] #a is am5d$ by add+ at ! end ! foll[+ new item3 ,sec4 #fh;,a4 ,b5efit ( itemiz$ d$uctions limit$ to #bh-p]c5t rate bracket4 4 7d7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjab4 ,,iii ,elim9ation ( tax loopholes = (f%or+ manufactur]s #cja4 ,end+ tax breaks = (f%or+ manufactur]s 7a7 ,g5]al ,rule ,subsection 7a7 ( section #ied ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by /rik+ ! p]iod at ! end ( p>agraph 7#e7 & ins]t+ 1 &1 by r$esignat+ p>agraph 7#e7 z p>agraph 7#d71 & by add+ at ! end ! foll[+ new p>agraph3 7#e7 import$ prop]ty income = ! taxable ye> 7det]m9$ "u subsection 7j7 & r$uc$ z provid$ 9 subsection 7b77#e774 4 7b7 ,def9ition ( ,import$ ,prop]ty ,income ,section #ied ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new subsection3 7j7 ,import$ ,prop]ty ,income 7#a7 ,9 g5]al ,= purposes ( subsection 7a77#e71 ! t]m import$ prop]ty income means income 7:e!r 9 ! =m ( pr(its1 commissions1 fees1 or o!rwise7 d]iv$ 9 connection )-- 7,a7 manufactur+1 produc+1 gr[+1 or extract+ import$ prop]ty2 7,b7 ! sale1 ex*ange1 or o!r disposition ( import$ prop]ty2 or 7,c7 ! lease1 r5tal1 or lic5s+ ( import$ prop]ty4 ,su* t]m %all n include any =eign oil & gas extraction income 7)9 ! mean+ ( section #ijg7;c77 or any =eign oil relat$ income 7)9 ! mean+ ( section #ijg7;c774 7#b7 ,import$ prop]ty ,= purposes ( ?is subsection-- 7,a7 ,9 g5]al ,except z o!rwise provid$ 9 ?is p>agraph1 ! t]m import$ prop]ty means prop]ty :i* is import$ into ! ,unit$ ,/ates by ! controll$ =eign corporation or a relat$ p]son4 7,b7 ,import$ prop]ty includes c]ta9 prop]ty import$ by unrelat$ p]sons ,! t]m import$ prop]ty includes any prop]ty import$ into ! ,unit$ ,/ates by an unrelat$ p]son if1 :5 su* prop]ty 0 sold to ! unrelat$ p]son by ! controll$ =eign corporation 7or a relat$ p]son71 x 0 reasonable to expect t-- 7i7 su* prop]ty w\ld be import$ into ! ,unit$ ,/ates2 or 7ii7 su* prop]ty w\ld be us$ z a compon5t 9 o!r prop]ty :i* w\ld be import$ into ! ,unit$ ,/ates4 7,c7 ,exception = prop]ty subsequ5tly export$ ,! t]m import$ prop]ty does n include any prop]ty :i* is import$ into ! ,unit$ ,/ates & :i*-- 7i7 be=e sub/antial use 9 ! ,unit$ ,/ates1 is sold1 leas$1 or r5t$ by ! controll$ =eign corporation or a relat$ p]son = direct use1 consumption1 or disposition outside ! ,unit$ ,/ates2 or 7ii7 is us$ by ! controll$ =eign corporation or a relat$ p]son z a compon5t 9 o!r prop]ty :i* is s sold1 leas$1 or r5t$4 7,d7 ,exception = c]ta9 agricultural commodities ,! t]m import$ prop]ty does n include any agricultural commodity :i* is n gr[n 9 ! ,unit$ ,/ates 9 comm]cially m>ketable quantities4 7#c7 ,def9itions & special rules 7,a7 ,import ,= purposes ( ?is subsection1 ! t]m import means ent]+1 or )drawal f w>eh\se1 = consumption or use4 ,su* t]m includes any grant ( ! "r to use intangible prop]ty 7z def9$ 9 section #icf7;h77#c77;,b77 9 ! ,unit$ ,/ates4 7,b7 ,unit$ /ates ,= purposes ( ?is subsection1 ! t]m ,unit$ ,/ates includes ! ,commonweal? ( ,pu]to ,rico1 ! ,virg9 ,isl&s ( ! ,unit$ ,/ates1 ,guam1 ,am]ican ,samoa1 & ! ,commonweal? ( ! ,nor!rn ,m>iana ,isl&s4 7,c7 ,unrelat$ p]son ,= purposes ( ?is subsection1 ! t]m unrelat$ p]son means any p]son :o is n a relat$ p]son ) respect to ! controll$ =eign corporation4 7,d7 ,coord9ation ) =eign base company sales income ,= purposes ( ?is section1 ! t]m =eign base company sales income %all n include any import$ prop]ty income4 4 7c7 ,sep>ate ,application ( ,limitations on ,=eign ,tax ,cr$it = ,import$ ,prop]ty ,income 7#a7 ,9 g5]al ,p>agraph 7#a7 ( section #ijd7;d7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by /rik+ & at ! end ( subp>agraph 7,a71 by r$esignat+ subp>agraph 7,b7 z subp>agraph 7,c71 & by ins]t+ aft] subp>agraph 7,a7 ! foll[+ new subp>agraph3 7,b7 import$ prop]ty income1 & 4 7#b7 ,import$ prop]ty income def9$ ,p>agraph 7#b7 ( section #ijd7;d7 ( su* ,code is am5d$ by r$esignat+ subp>agraphs 7,i71 7,j71 & 7,k7 z subp>agraphs 7,j71 7,k71 & 7,l71 respectively1 & by ins]t+ aft] subp>agraph 7,h7 ! foll[+ new subp>agraph3 7,i7 ,import$ prop]ty income ,! t]m import$ prop]ty income means any income receiv$ or accru$ by any p]son :i* is ( a k9d :i* w\ld be import$ prop]ty income 7z def9$ 9 section #ied7;j774 4 7#c7 ,con=m+ am5dm5t ,clause 7ii7 ( section #ijd7;d77#b77;,a7 ( su* ,code is am5d$ by ins]t+ or import$ prop]ty income aft] passive category income4 7d7 ,te*nical ,am5dm5ts 7#a7 ,clause 7iii7 ( section #ieb7;c77#a77;,b7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$-- 7,a7 by r$esignat+ subclauses 7,,ii71 7,,iii71 7,,iv71 & 7,v7 z subclauses 7,,iii71 7,,iv71 7,v71 & 7,,vi71 & 7,b7 by ins]t+ aft] subclause 7,i7 ! foll[+ new subclause3 7,,ii7 import$ prop]ty income1 4 7#b7 ,! la/ s5t5ce ( p>agraph 7#d7 ( section #ied7;b7 ( su* ,code is am5d$ by /rik+ subsection 7a77#e7 & ins]t+ subsection 7a77#d74 7#c7 ,p>agraph 7#e7 ( section #ied7;b7 ( su* ,code is am5d$ by /rik+ & ! =eign base company oil relat$ income & ins]t+ ! =eign base company oil relat$ income1 & ! import$ prop]ty income4 7e7 ,effective ,date ,! am5dm5ts made by ?is section %all apply to taxable ye>s ( =eign corporations beg9n+ aft] ! date ( ! enactm5t ( ?is ,act1 & to taxable ye>s ( ,unit$ ,/ates %>ehold]s )9 :i* or ) :i* su* taxable ye>s ( su* =eign corporations end4 ,,iv ,elim9ation ( tax loopholes = oil & gas companies #dja4 ,modifications ( =eign tax cr$it rules applicable to major integrat$ oil companies :i* are dual capacity taxpay]s 7a7 ,9 g5]al ,section #ija ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by r$esignat+ subsection 7n7 z subsection 7o7 & by ins]t+ aft] subsection 7m7 ! foll[+ new subsection3 7n7 ,special rules relat+ to major integrat$ oil companies :i* are dual capacity taxpay]s 7#a7 ,g5]al rule ,not)/&+ any o!r provision ( ?is *apt]1 any am\nt paid or accru$ by a dual capacity taxpay] :i* is a major integrat$ oil company 7z def9$ 9 section #afg7;h77#e77;,b77 to a =eign c\ntry or possession ( ! ,unit$ ,/ates = any p]iod %all n be consid]$ a tax-- 7,a7 if1 = su* p]iod1 ! =eign c\ntry or possession does n impose a g5]ally applicable income tax1 or 7,b7 to ! ext5t su* am\nt exce$s ! am\nt 7det]m9$ 9 accordance ) regulations7 :i*-- 7i7 is paid by su* dual capacity taxpay] pursuant to ! g5]ally applicable income tax impos$ by ! c\ntry or possession1 or 7ii7 w\ld be paid if ! g5]ally applicable income tax impos$ by ! c\ntry or possession 7 applicable to su* dual capacity taxpay]4 ,no?+ 9 ?is p>agraph %all be con/ru$ to imply ! prop] treatm5t ( any su* am\nt n 9 excess ( ! am\nt det]m9$ "u subp>agraph 7,b74 7#b7 ,dual capacity taxpay] ,= purposes ( ?is subsection1 ! t]m dual capacity taxpay] means1 ) respect to any =eign c\ntry or possession ( ! ,unit$ ,/ates1 a p]son :o-- 7,a7 is subject to a levy ( su* c\ntry or possession1 & 7,b7 receives 7or w receive7 directly or indirectly a specific economic b5efit 7z det]m9$ 9 accordance ) regulations7 f su* c\ntry or possession4 7#c7 ,g5]ally applicable income tax ,= purposes ( ?is subsection-- 7,a7 ,9 g5]al ,! t]m g5]ally applicable income tax means an income tax 7or a s]ies ( income taxes7 :i* is g5]ally impos$ "u ! laws ( a =eign c\ntry or possession on income d]iv$ f ! conduct ( a trade or bus9ess )9 su* c\ntry or possession4 7,b7 ,exceptions ,su* t]m %all n include a tax unless x has sub/antial application1 by its t]ms & 9 practice1 to-- 7i7 p]sons :o are n dual capacity taxpay]s1 & 7ii7 p]sons :o are citiz5s or resid5ts ( ! =eign c\ntry or possession4 4 7b7 ,effective ,date 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to taxes paid or accru$ 9 taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 7#b7 ,contr>y treaty obligations upheld ,! am5dm5ts made by ?is section %all n apply to ! ext5t contr>y to any treaty obligation ( ! ,unit$ ,/ates4 #djb4 ,limitation on section #aii d$uction attributable to oil1 natural gas1 or prim>y products !re( 7a7 ,d5ial ( d$uction ,p>agraph 7#d7 ( section #aii7;c7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new subp>agraph3 7,e7 ,special rule = c]ta9 oil & gas income ,9 ! case ( any taxpay] :o is a major integrat$ oil company 7z def9$ 9 section #afg7;h77#e77;,b77 = ! taxable ye>1 ! t]m dome/ic production gross receipts %all n include gross receipts f ! production1 transportation1 or di/ribution ( oil1 natural gas1 or any prim>y product 7)9 ! mean+ ( subsection 7d77#i77 !re(4 4 7b7 ,effective date ,! am5dm5t made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjab4 #djc4 ,limitation on d$uction = intangible drill+ & developm5t co/s 7a7 ,9 g5]al ,section #bfc7;c7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new s5t5ce3 ,?is subsection %all n apply to am\nts paid or incurr$ by a taxpay] 9 any taxable ye> 9 :i* su* taxpay] is a major integrat$ oil company 7z def9$ 9 section #afg7;h77#e77;,b7744 7b7 ,effective date ,! am5dm5t made by ?is section %all apply to am\nts paid or incurr$ 9 taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjab4 #djd4 ,limitation on p]c5tage depletion all[ance = oil & gas wells 7a7 ,9 g5]al ,section #fac;,a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new subsection3 7f7 ,application ) respect to major integrat$ oil companies ,9 ! case ( any taxable ye> 9 :i* ! taxpay] is a major integrat$ oil company 7z def9$ 9 section #afg7;h77#e77;,b771 ! all[ance = p]c5tage depletion %all be z]o4 4 7b7 ,effective date ,! am5dm5t made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjab4 #dje4 ,limitation on d$uction = t]ti>y injectants 7a7 ,9 g5]al ,section #aic ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new subsection3 7d7 ,application ) respect to major integrat$ oil companies ,?is section %all n apply to am\nts paid or incurr$ by a taxpay] 9 any taxable ye> 9 :i* su* taxpay] is a major integrat$ oil company 7z def9$ 9 section #afg7;h77#e77;,b774 4 7b7 ,effective date ,! am5dm5t made by ?is section %all apply to am\nts paid or incurr$ 9 taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjab4 #djf4 ,repeal ( out] ,cont95tal ,%elf deep wat] & deep gas royalty relief 7a7 ,9 g5]al ,sections #cdd & #cde ( ! ,en]gy ,policy ,act ( #bjje 7#db ,u4,s4,c4 #aeijd1 #aeije7 are repeal$4 7b7 ,adm9i/ration ,! ,secret>y ( ! ,int]ior %all n be requir$ to provide = royalty relief 9 ! lease sale t]ms beg9n+ ) ! fir/ lease sale held on or aft] ! date ( enactm5t ( ?is ,act = :i* a f9al notice ( sale has n be5 publi%$4 ,v ,end+ ,int]national ,tax ,abuses #eja4 ,allocation ( exp5ses & taxes on basis ( repatriation ( =eign income 7a7 ,9 g5]al ,"p ,,iii ( sub*apt] ,n ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] subp>t ,g ! foll[+ new subp>t3 ,h ,special ,rules = ,allocation ( ,=eign-,relat$ ,d$uctions & ,=eign ,tax ,cr$its ,sec4 #ige4 ,d$uctions allocat$ to def]r$ =eign income may n (fset ,unit$ ,/ates s\rce income4 ,sec4 #igf4 ,am\nt ( =eign taxes comput$ on ov]all basis4 ,sec4 #igg4 ,application ( subp>t4 #ige4 ,d$uctions allocat$ to def]r$ =eign income may n (fset ,unit$ ,/ates s\rce income 7a7 ,curr5t ye> d$uctions ,= purposes ( ?is *apt]1 =eign-relat$ d$uctions = any taxable ye>-- 7#a7 %all be tak5 into acc\nt = su* taxable ye> only to ! ext5t t su* d$uctions are allocable to curr5tly-tax$ =eign income1 & 7#b7 to ! ext5t n s all[$1 %all be tak5 into acc\nt 9 subsequ5t taxable ye>s z provid$ 9 subsection 7b74 ,=eign-relat$ d$uctions %all be allocat$ to curr5tly tax$ =eign income 9 ! same proportion :i* curr5tly tax$ =eign income be>s to ! sum ( curr5tly tax$ =eign income & def]r$ =eign income4 7b7 ,d$uctions relat$ to repatriat$ def]r$ =eign income 7#a7 ,9 g5]al ,if !re is repatriat$ =eign income = a taxable ye>1 ! portion ( ! previ\sly def]r$ d$uctions allocat$ to ! repatriat$ =eign income %all be tak5 into acc\nt = ! taxable ye> z a d$uction allocat$ to income f s\rces outside ! ,unit$ ,/ates4 ,any su* am\nt %all n be includ$ 9 =eign-relat$ d$uctions = purposes ( apply+ subsection 7a7 to su* taxable ye>4 7#b7 ,portion ( previ\sly def]r$ d$uctions ,= purposes ( p>agraph 7#a71 ! portion ( ! previ\sly def]r$ d$uctions allocat$ to repatriat$ =eign income is-- 7,a7 ! am\nt :i* be>s ! same proportion to su* d$uctions1 z 7,b7 ! repatriat$ income be>s to ! previ\sly def]r$ =eign income4 7c7 ,def9itions & special rule ,= purposes ( ?is section-- 7#a7 ,=eign-relat$ d$uctions ,! t]m =eign-relat$ d$uctions means ! total am\nt ( d$uctions & exp5ses :i* w\ld be allocat$ or apportion$ to gross income f s\rces )\t ! ,unit$ ,/ates = ! taxable ye> if bo? ! curr5tly-tax$ =eign income & def]r$ =eign income 7 tak5 into acc\nt4 7#b7 ,curr5tly-tax$ =eign income ,! t]m curr5tly-tax$ =eign income means ! am\nt ( gross income f s\rces )\t ! ,unit$ ,/ates = ! taxable ye> 7det]m9$ )\t reg>d to repatriat$ =eign income = su* ye>74 7#c7 ,def]r$ =eign income ,! t]m def]r$ =eign income means ! excess (-- 7,a7 ! am\nt t w\ld be includible 9 gross income "u subp>t ,f ( ?is "p = ! taxable ye> if-- 7i7 all controll$ =eign corporations 7 treat$ z "o controll$ =eign corporation1 & 7ii7 all e>n+s & pr(its ( all controll$ =eign corporations 7 subp>t ,f income 7z def9$ 9 section #ieb71 ov] 7,b7 ! sum (-- 7i7 all divid5ds receiv$ dur+ ! taxable ye> f controll$ =eign corporations1 plus 7ii7 am\nts includible 9 gross income "u section #iea7;a74 7#d7 ,previ\sly def]r$ =eign income ,! t]m previ\sly def]r$ =eign income means ! aggregate am\nt ( def]r$ =eign income = all prior taxable ye>s to :i* ?is "p applies1 det]m9$ z ( ! beg9n+ ( ! taxable ye>1 r$uc$ by ! repatriat$ =eign income = all su* prior taxable ye>s4 7#e7 ,repatriat$ =eign income ,! t]m repatriat$ =eign income means ! am\nt includ$ 9 gross income on acc\nt ( di/ributions out ( previ\sly def]r$ =eign income4 7#f7 ,previ\sly def]r$ d$uctions ,! t]m previ\sly def]r$ d$uctions means ! aggregate am\nt ( =eign-relat$ d$uctions n tak5 into acc\nt "u subsection 7a7 = all prior taxable ye>s 7det]m9$ z ( ! beg9n+ ( ! taxable ye>71 r$uc$ by any am\nts tak5 into acc\nt "u subsection 7b7 = su* prior taxable ye>s4 7#g7 ,treatm5t ( c]ta9 =eign taxes 7,a7 ,paid by controll$ =eign corporation ,section #gh %all n apply = purposes ( det]m9+ curr5tly-tax$ =eign income & def]r$ =eign income4 7,b7 ,paid by taxpay] ,= purposes ( det]m9+ curr5tly-tax$ =eign income1 gross income f s\rces )\t ! ,unit$ ,/ates %all be r$uc$ by ! aggregate am\nt ( taxes describ$ 9 ! applicable p>agraph ( section #ija7;b7 :i* are paid by ! taxpay] 7)\t reg>d to sections #ijb & #ifj7 dur+ ! taxable ye>4 7#h7 ,coord9ation ) section #igf ,9 det]m9+ curr5tly-tax$ =eign income & def]r$ =eign income1 ! am\nt ( deem$ =eign tax cr$its %all be det]m9$ ) reg>d to section #igf4 #igf4 ,am\nt ( =eign taxes comput$ on ov]all basis 7a7 ,curr5t ye> all[ance ,= purposes ( ?is *apt]1 ! am\nt tak5 into acc\nt z =eign income taxes = any taxable ye> %all be an am\nt :i* be>s ! same ratio to ! total =eign income taxes = t taxable ye> z-- 7#a7 ! curr5tly-tax$ =eign income = su* taxable ye>1 be>s to 7#b7 ! sum ( ! curr5tly-tax$ =eign income & def]r$ =eign income = su* ye>4 ,! portion ( ! total =eign income taxes = any taxable ye> n tak5 into acc\nt "u ! prec$+ s5t5ce = a taxable ye> %all only be tak5 into acc\nt z provid$ 9 subsection 7b7 7& %all n be tak5 into acc\nt = purposes ( apply+ sections #ijb & #ifj74 7b7 ,all[ance relat$ to repatriat$ def]r$ =eign income 7#a7 ,9 g5]al ,if !re is repatriat$ =eign income = any taxable ye>1 ! portion ( ! previ\sly def]r$ =eign income taxes paid or accru$ dur+ su* taxable ye> %all be tak5 into acc\nt = ! taxable ye> z =eign taxes paid or accru$4 ,any su* taxes s tak5 into acc\nt %all n be includ$ 9 =eign income taxes = purposes ( apply+ subsection 7a7 to su* taxable ye>4 7#b7 ,portion ( previ\sly def]r$ =eign income taxes ,= purposes ( p>agraph 7#a71 ! portion ( ! previ\sly def]r$ =eign income taxes allocat$ to repatriat$ def]r$ =eign income is-- 7,a7 ! am\nt :i* be>s ! same proportion to su* taxes1 z 7,b7 ! repatriat$ def]r$ income be>s to ! previ\sly def]r$ =eign income4 7c7 ,def9itions & special rule ,= purposes ( ?is section-- 7#a7 ,previ\sly def]r$ =eign income taxes ,! t]m previ\sly def]r$ =eign income taxes means ! aggregate am\nt ( total =eign income taxes n tak5 into acc\nt "u subsection 7a7 = all prior taxable ye>s 7det]m9$ z ( ! beg9n+ ( ! taxable ye>71 r$uc$ by any am\nts tak5 into acc\nt "u subsection 7b7 = su* prior taxable ye>s4 7#b7 ,total =eign income taxes ,! t]m total =eign income taxes means ! sum ( =eign income taxes paid or accru$ dur+ ! taxable ye> 7det]m9$ )\t reg>d to section #ijd7;c77 plus ! increase 9 =eign income taxes t w\ld be paid or accru$ dur+ ! taxable ye> "u sections #ijb & #ifj if-- 7,a7 all controll$ =eign corporations 7 treat$ z "o controll$ =eign corporation1 & 7,b7 all e>n+s & pr(its ( all controll$ =eign corporations 7 subp>t ,f income 7z def9$ 9 section #ieb74 7#c7 ,=eign income taxes ,! t]m =eign income taxes means any income1 w> pr(its1 or excess pr(its taxes paid by ! taxpay] to any =eign c\ntry or possession ( ! ,unit$ ,/ates4 7#d7 ,curr5tly-tax$ =eign income & def]r$ =eign income ,! t]ms curr5tly-tax$ =eign income & def]r$ =eign income h ! mean+s giv5 su* t]ms by section #ige7;c74 #igg4 ,application ( subp>t ,?is subp>t-- 7#a7 %all be appli$ be=e subp>t ,a1 & 7#b7 %all be appli$ sep>ately ) respect to ! categories ( income specifi$ 9 section #ijd7;d77#a74 4 7b7 ,cl]ical am5dm5t ,! table ( subp>ts = "p ,,iii ( subp>t ,n ( *apt] #a ( su* ,code is am5d$ by ins]t+ aft] ! item relat+ to subp>t ,g ! foll[+ new item3 ,subp>t ,h4 ,special ,rules = ,allocation ( ,=eign-,relat$ ,d$uctions & ,=eign ,tax ,cr$its4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 #ejb4 ,excess income f transf]s ( intangibles to l[-tax$ affiliates treat$ z subp>t ,f income 7a7 ,9 g5]al ,subsection 7a7 ( section #ied ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] p>agraph 7#c7 ! foll[+ new p>agraph3 7#d7 ! =eign base company excess intangible income = ! taxable ye> 7det]m9$ "u subsection 7f7 & r$uc$ z provid$ 9 subsection 7b77#e771 & 4 7b7 ,=eign base company excess intangible income ,section #ied ( su* ,code is am5d$ by ins]t+ aft] subsection 7e7 ! foll[+ new subsection3 7f7 ,=eign base company excess intangible income ,= purposes ( subsection 7a77#d7 & ?is subsection3 7#a7 ,=eign base company excess intangible income def9$ 7,a7 ,9 g5]al ,! t]m =eign base company excess intangible income means1 ) respect to any cov]$ intangible1 ! excess (-- 7i7 ! sum (-- 7,i7 gross income f ! sale1 lease1 lic5se1 or o!r disposition ( prop]ty 9 :i* su* cov]$ intangible is us$ directly or indirectly1 & 7,,ii7 gross income f ! provision ( s]vices relat$ to su* cov]$ intangible or 9 connection ) prop]ty 9 :i* su* cov]$ intangible is us$ directly or indirectly1 ov] 7ii7 #aej p]c5t ( ! co/s prop]ly allocat$ & apportion$ to ! gross income tak5 into acc\nt "u clause 7i7 o!r ?an exp5ses = int]e/ & taxes & any exp5ses :i* are n directly allocable to su* gross income4 7,b7 ,same c\ntry income n tak5 into acc\nt ,if-- 7i7 ! sale1 lease1 lic5se1 or o!r disposition ( ! prop]ty ref]r$ to 9 subp>agraph 7,a77i77,i7 is = use1 consumption1 or disposition 9 ! c\ntry "u ! laws ( :i* ! controll$ =eign corporation is creat$ or organiz$1 or 7ii7 ! s]vices ref]r$ to 9 subp>agraph 7,a77i77,,ii7 are p]=m$ 9 su* c\ntry1 ! gross income f su* sale1 lease1 lic5se1 or o!r disposition1 or provision ( s]vices1 %all n be tak5 into acc\nt "u subp>agraph 7,a77i74 7#b7 ,exception bas$ on effective =eign income tax rate 7,a7 ,9 g5]al ,=eign base company excess intangible income %all n include ! applicable p]c5tage ( any item ( income receiv$ by a controll$ =eign corporation if ! taxpay] e/abli%es to ! satisfaction ( ! ,secret>y t su* income 0 subject to an effective rate ( income tax impos$ by a =eign c\ntry 9 excess ( #e p]c5t4 7,b7 ,applicable p]c5tage ,= purposes ( subp>agraph 7,a71 ! t]m applicable p]c5tage means ! ratio 7express$ z a p]c5tage71 n great] ?an #ajj p]c5t1 (-- 7i7 ! numb] ( p]c5tage po9ts by :i* ! effective rate ( income tax ref]r$ to 9 subp>agraph 7,a7 exce$s #e p]c5tage po9ts1 ov] 7ii7 #aj p]c5tage po9ts4 7,c7 ,treatm5t ( losses 9 det]m9+ effective rate ( =eign income tax ,= purposes ( det]m9+ ! effective rate ( income tax impos$ by any =eign c\ntry-- 7i7 su* effective rate %all be det]m9$ )\t reg>d to any losses c>ri$ to ! relevant taxable ye>1 & 7ii7 to ! ext5t ! income ) respect to su* intangible r$uces losses 9 ! relevant taxable ye>1 su* effective rate %all be treat$ z be+ ! effective rate :i* w\ld h be5 impos$ on su* income )\t reg>d to su* losses4 7#c7 ,cov]$ intangible ,! t]m cov]$ intangible means1 ) respect to any controll$ =eign corporation1 any intangible prop]ty 7z def9$ 9 section #icf7;h77#c77;,b77-- 7,a7 :i* is sold1 leas$1 lic5s$1 or o!rwise transf]r$ 7directly or indirectly7 to su* controll$ =eign corporation f a relat$ p]son1 or 7,b7 ) respect to :i* su* controll$ =eign corporation & "o or m relat$ p]sons has 7directly or indirectly7 ent]$ into any %>$ risk or developm5t agreem5t 7includ+ any co/ %>+ agreem5t74 7#d7 ,relat$ p]son ,! t]m relat$ p]son has ! mean+ giv5 su* t]m 9 subsection 7d77#c74 4 7c7 ,sep>ate basket = =eign tax cr$it ,subsection 7d7 ( section #ijd ( su* ,code is am5d$ by r$esignat+ p>agraph 7#g7 z p>agraph 7#h7 & by ins]t+ aft] p>agraph 7#f7 ! foll[+ new p>agraph3 7#f7 ,sep>ate application to =eign base company excess intangible income 7,a7 ,9 g5]al ,subsections 7a71 7b71 & 7c7 ( ?is section & sections #ijb1 #ijg1 & #ifj %all be appli$ sep>ately ) respect to ea* item ( income :i* is tak5 into acc\nt "u section #ied7;a77#d7 z =eign base company excess intangible income4 7,b7 ,regulations ,! ,secret>y may issue su* regulations or o!r guidance z is necess>y or appropriate to c>ry out ! purposes ( ?is subsection1 includ+ regulations or o!r guidance :i* provides t relat$ items ( income may be aggregat$ = purposes ( ?is p>agraph4 4 7d7 ,con=m+ am5dm5ts 7#a7 ,p>agraph 7#d7 ( section #ied7;b7 ( su* ,code is am5d$ by ins]t+ =eign base company excess intangible income describ$ 9 subsection 7a77#d7 or be=e =eign base company oil-relat$ income 9 ! la/ s5t5ce !re(4 7#b7 ,subsection 7b7 ( section #ied ( su* ,code is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#g7 ,=eign base company excess intangible income n treat$ z ano!r k9d ( base company income ,income ( a corporation :i* is =eign base company excess intangible income %all n be consid]$ =eign base company income ( su* corporation "u p>agraph 7#b71 7#c71 or 7#e7 ( subsection 7a74 4 7e7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 #ejc4 ,limitations on income %ift+ ?r\gh intangible prop]ty transf]s 7a7 ,cl>ification ( def9ition ( intangible asset ,clause 7vi7 ( section #icf7;h77#c77;,b7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ 7includ+ any section #aig intangible describ$ 9 subp>agraph 7,a71 7,b71 or 7,c77i7 ( subsection 7d77#a7 ( su* section7 aft] item4 7b7 ,cl>ification ( all[able valuation me?ods 7#a7 ,=eign corporations ,p>agraph 7#b7 ( section #cfg7;d7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new subp>agraph3 7,d7 ,regulatory au?ority ,= purposes ( ! la/ s5t5ce ( subp>agraph 7,a71 ! ,secret>y may require-- 7i7 ! valuation ( transf]s ( intangible prop]ty on an aggregate basis1 or 7ii7 ! valuation ( su* a transf] on ! basis ( ! reali/ic alt]natives to su* a transf]1 9 any case 9 :i* ! ,secret>y det]m9es t su* basis is ! mo/ reliable means ( valuation ( su* transf]s4 4 7#b7 ,allocation among taxpay]s ,section #dhb ( su* ,code is am5d$ by add+ at ! end ! foll[+3 ,= purposes ( ! prec$+ s5t5ce1 ! ,secret>y may require ! valuation ( transf]s ( intangible prop]ty on an aggregate basis or ! valuation ( su* a transf] on ! basis ( ! reali/ic alt]natives to su* a transf]1 9 any case 9 :i* ! ,secret>y det]m9es t su* basis is ! mo/ reliable means ( valuation ( su* transf]s44 7c7 ,effective date 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to transf]s 9 taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 7#b7 ,no inf]5ce ,no?+ 9 ! am5dm5t made by subsection 7a7 %all be con/ru$ to create any inf]5ce ) respect to ! application ( section #icf7;h77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf1 or ! au?ority ( ! ,secret>y ( ! ,treasury to provide regulations = su* application1 on or be=e ! date ( ! enactm5t ( su* am5dm5t4 #ejd4 ,limitation on e>n+s /ripp+ by expatriat$ entities 7a7 ,9 g5]al ,subsection 7j7 ( section #afc ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$-- 7#a7 by r$esignat+ p>agraph 7#i7 z p>agraph 7#aj71 & 7#b7 by ins]t+ aft] p>agraph 7#h7 ! foll[+ new p>agraph3 7#i7 ,special rules = expatriat$ entities 7,a7 ,9 g5]al ,9 ! case ( a corporation to :i* ?is subsection applies :i* is an expatriat$ entity1 ?is subsection %all apply to su* corporation ) ! foll[+ modifications3 7i7 ,p>agraph 7#b77;,a7 %all be appli$ )\t reg>d to clause 7ii7 !re(4 7ii7 ,p>agraph 7#a77;,b7 %all be appli$-- 7,i7 )\t reg>d to ! p>5!tical1 & 7,,ii7 by sub/itut+ 9 ! #a/ succe$+ taxable ye> & 9 ! #bnd ?r\gh #aj? succe$+ taxable ye>s to ! ext5t n previ\sly tak5 into acc\nt "u ?is subp>agraph = 9 ! succe$+ taxable ye>4 7iii7 ,p>agraph 7#b77;,b7 %all be appli$-- 7,i7 )\t reg>d to clauses 7ii7 & 7iii71 & 7,,ii7 by sub/itut+ #be p]c5t ( ! adju/$ taxable income ( ! corporation = su* taxable ye> = ! matt] ( clause 7i77,,ii7 !re(4 7,b7 ,expatriat$ entity ,= purposes ( ?is p>agraph-- 7i7 ,9 g5]al ,) respect to a corporation & a taxable ye>1 ! t]m expatriat$ entity has ! mean+ giv5 su* t]m by section #ghgd7;a77#b71 det]m9$ z if su* section & ! regulations "u su* section z 9 effect on ! fir/ day ( su* taxable ye> appli$ to all taxable ye>s ( ! corporation beg9n+ aft] ,july #aj1 #aihi4 7ii7 ,exception = surrogates treat$ z a dome/ic corporation ,! t]m expatriat$ entity does n include a surrogate =eign corporation :i* is treat$ z a dome/ic corporation by reason ( section #ghgd7;b74 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 #eje4 ,modifications ( =eign tax cr$it rules applicable to dual capacity taxpay]s 7a7 ,9 g5]al ,section #ija ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by r$esignat+ subsection 7n7 z subsection 7o7 & by ins]t+ aft] subsection 7m7 ! foll[+ new subsection3 7n7 ,special ,rules ,relat+ to ,dual ,capacity ,taxpay]s 7#a7 ,g5]al rule ,not)/&+ any o!r provision ( ?is *apt]1 any am\nt paid or accru$ by a dual capacity taxpay] or any memb] ( ! worldwide affiliat$ gr\p ( :i* su* dual capacity taxpay] is also a memb] to any =eign c\ntry or to any possession ( ! ,unit$ ,/ates = any p]iod %all n be consid]$ a tax to ! ext5t su* am\nt exce$s ! am\nt 7det]m9$ 9 accordance ) regulations7 :i* w\ld h be5 requir$ to be paid if ! taxpay] 7 n a dual capacity taxpay]4 7#b7 ,dual capacity taxpay] ,= purposes ( ?is subsection1 ! t]m #8dual capacity taxpay]' means1 ) respect to any =eign c\ntry or possession ( ! ,unit$ ,/ates1 a p]son :o-- 7,a7 is subject to a levy ( su* c\ntry or possession1 & 7,b7 receives 7or w receive7 directly or indirectly a specific economic b5efit 7z det]m9$ 9 accordance ) regulations7 f su* c\ntry or possession4 7#c7 ,regulations ,! ,secret>y may issue su* regulations or o!r guidance z is necess>y or appropriate to c>ry out ! purposes ( ?is subsection4 4 7b7 ,contr>y ,treaty ,obligations ,upheld ,! am5dm5ts made by ?is section %all n apply to ! ext5t contr>y to any treaty obligation ( ! ,unit$ ,/ates4 7c7 ,effective ,date ,! am5dm5ts made by ?is section %all apply to am\nts t1 if su* am\nts 7 an am\nt ( tax paid or accru$1 w\ld be consid]$ paid or accru$ 9 taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjab4 #ejf4 ,sep>ate basket treatm5t taxes paid on =eign oil & gas income 7a7 ,sep>ate ,basket = ,=eign ,tax ,cr$it ,p>agraph 7#a7 ( section #ijd7;d7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by /rik+ & at ! end ( subp>agraph 7,a71 by /rik+ ! p]iod at ! end ( subp>agraph 7,b7 & ins]t+ 1 &1 & by add+ at ! end ! foll[+3 7,c7 comb9$ =eign oil & gas income 7z def9$ 9 section #ijg7;b77#a774 4 7b7 ,coord9ation ,section #ijd7;d77#b7 ( su* ,code is am5d$ by r$esignat+ subp>agraphs 7,j7 & 7,k7 z subp>agraphs 7,k7 & 7,l7 & by ins]t+ aft] subp>agraph 7,i7 ! foll[+3 7,j7 ,coord9ation ) comb9$ =eign oil & gas income ,= purposes ( ?is section1 passive category income & g5]al category income %all n include comb9$ =eign oil & gas income 7z def9$ 9 section #ijg7;b77#a774 4 7c7 ,con=m+ am5dm5ts 7#a7 ,section #ijg7;a7 ( su* ,code is h]eby repeal$4 7#b7 ,section #ijg7;c77#d7 ( su* ,code is h]eby repeal$4 7#c7 ,section #ijg7;f7 ( su* ,code is h]eby repeal$4 7d7 ,effective dates 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjab4 7#b7 ,transitional rules 7,a7 ,c>ryov]s ,any unus$ =eign oil & gas taxes :i* "u section #ijg7;f7 ( su* ,code 7z 9 effect be=e ! am5dm5t made by subsection 7c77#c77 w\ld h be5 all[able z a c>ryov] to ! taxpay]'s fir/ taxable ye> beg9n+ aft] ,decemb] #ca1 #bjab 7)\t reg>d to ! limitation ( p>agraph 7#b7 ( su* section #ijg7;f7 = fir/ taxable ye>7 %all be all[$ z c>ryov]s "u section #ijd7;c7 ( su* ,code 9 ! same mann] z if su* taxes 7 unus$ taxes "u su* section #ijd7;c7 ) respect to =eign oil & gas extraction income4 7,b7 ,losses ,! am5dm5t made by subsection 7c77#b7 %all n apply to =eign oil & gas extraction losses aris+ 9 taxable ye>s beg9n+ on or be=e ! date ( ! enactm5t ( ?is ,act4 ,,vi ,f9ancial crisis responsibility fee #fja4 ,def9itions & special rules 7a7 ,def9itions ,9 ?is title1 ! foll[+ def9itions %all apply3 7#a7 ,appropriate ,f$]al ag5cy ,! t]m appropriate ,f$]al ag5cy means-- 7,a7 = a cov]$ firm t is a bank hold+ company1 a sav+s & loan hold+ company1 any company controll$ by a bank hold+ company or sav+s & loan in/itution 7o!r ?an a depository in/itution71 a /ate memb] bank1 a bran* or ag5cy ( a =eign bank1 a =eign bank t does n op]ate an insur$ bran*1 an ag5cy or comm]cial l5d+ company o!r ?an a ,f$]al ag5cy or any company t controls a regi/]$ brok] or deal] b does n also control an insur$ depository in/itution1 ! ,bo>d ( ,gov]nors ( ! ,f$]al ,res]ve ,sy/em2 7,b7 = a cov]$ firm t is a national bank+ association1 a ,f$]al bran* or ag5cy ( a =eign bank1 or a f$]al sav+s association1 ! ,(fice ( ! ,comptroll] ( ! ,curr5cy2 7,c7 = a cov]$ firm t is a /ate nonmemb] insur$ bank1 a =eign bank t has an insur$ bran*1 a /ate sav+s association1 or a company t controls an insur$ depository in/itution & is n regulat$ z a bank hold+ company or a sav+s & loan association hold+ company1 ! ,f$]al ,deposit ,insurance ,corporation2 & 7,d7 = a cov]$ firm t is a cov]$ brok] or deal]1 ! ,securities & ,ex*ange ,commission4 7#b7 ,bank hold+ company ,! t]m bank hold+ company has ! same mean+ z 9 section #c7w77#b7 ( ! ,f$]al ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7w77#b774 7#c7 ,cov]$ brok] or deal] ,! t]m cov]$ brok] or deal] means a brok] or deal] designat$ by ! ,bo>d ( ,gov]nors ( ! ,f$]al ,res]ve ,sy/em or ! ,f$]al ,res]ve ,bank ( ,new ,york z a prim>y deal] 9 gov]nm5t debt in/rum5ts4 7#d7 ,cov]$ firm ,! t]m cov]$ firm means any corporation or o!r entity t is organiz$ "u ! laws ( ! ,unit$ ,/ates or any /ate or t]ritory !re( if-- 7,a7 z ( ,janu>y #ad1 #bjab1 su* corporation or o!r entity 01 or is at any "t dur+ a ! beg9n+ ( ! fiscal ye> = :i* ?is section is applicable1 an insur$ depository in/itution1 a bank hold+ company1 a sav+s & loan hold+ company1 a company t directly or indirectly controls an insur$ depository in/itution1 a cov]$ brok] or deal]1 or a company t directly or indirectly controls a cov]$ brok] or deal]2 & 7,b7 has #ej1jjj1jjj1jjj or m 9 total consolidat$ balance %eet assets t are associat$ ) activities t are p]missible = a bank hold+ company or a f9ancial hold+ company "u sections #c & #d ( ! ,bank ,hold+ ,company ,act ( #aief 7#ab ,u4,s4,c4 #ahdb & #ahdc7 at ! beg9n+ ( ! fiscal ye>4 7#e7 ,fee ,! t]m fee means ! ,f9ancial ,crisis ,responsibility ,fee au?oriz$ "u section #ejb4 7#f7 ,f9ancial hold+ company ,! t]m f9ancial hold+ company has ! same mean+ z 9 section #b7p7 ( ! ,bank ,hold+ ,company ,act ( #aief1 7#ab ,u4,s4,c4 #ahda7b77q774 7#g7 ,fiscal ye> ,! t]m fiscal ye> means ! ,gov]nm5t's fiscal ye> beg9n+ on ,octob] #a4 7#h7 ,=eign bank+ organization ,! t]m =eign bank+ organization means-- 7,a7 a =eign bank1 z def9$ 9 section #a7;b77#g7 ( ! ,int]national ,bank+ ,act ( #aigh 7#ab ,u4,s4,c4 #caja7g771 t-- 7i7 op]ates a bran*1 ag5cy1 or comm]cial l5d+ company subsidi>y 9 ! ,unit$ ,/ates2 7ii7 controls a bank 9 ! ,unit$ ,/ates2 or 7iii7 controls an ,edge corporation acquir$ aft] ,m>* #e1 #aihg2 & 7,b7 any company t directly or indirectly controls ! =eign bank4 7#i7 ,secret>y ,! t]m ,secret>y means ! ,secret>y ( ! ,treasury4 7#aj7 ,top-ti] cov]$ firm ,! t]m top-ti] cov]$ firm means a cov]$ firm t controls "o or m o!r cov]$ firms b is n itself directly or indirectly controll$ by ano!r cov]$ firm4 7#aa7 ,additional def9itions ,= purposes ( ?is *apt]1 ! t]ms insur$ depository in/itution & sav+s & loan hold+ company %all h ! same mean+s z 9 section #c ( ! ,f$]al ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7b7 ,special rules 7#a7 ,det]m9ation ( control ,= purposes ( ?is ,act1 a p]son %all be consid]$ to control ano!r p]son if ! fir/ su* p]son directly or indirectly owns 7or o!rwise has ! p[] to vote7 #be p]c5t or m ( any class ( vot+ securities ( ! second su* p]son4 7#b7 ,treatm5t ( c]ta9 affiliat$ companies ,= purposes ( det]m9+ ! applicability ( ?is ,act & ! am\nt ( ! ,fee payable "u section #ejb1 ! total consolidat$ balance %eet assets ( any two or m corporations or o!r entities t are organiz$ "u ! laws ( ! ,unit$ ,/ates or any /ate or t]ritory !re( t ea* meet any ( ! crit]ia describ$ 9 subsection 7a77#d77;,a7 & t are "u common control1 directly or indirectly1 by ! same p]son b t are n "u common control1 directly or indirectly1 by any top-ti] cov]$ firm %all be consolidat$ toge!r4 ,if1 foll[+ su* consolidation1 ! am\nt & o!r *>act]i/ics ( ! comb9$ balance %eet assets ( su* firms satisfy ! crit]ia specifi$ 9 subsection 7a77#d77;,b71 ea* su* firm %all be deem$ a cov]$ firm & ! result+ am\nt ( fee %all be appropriately apportion$ by ! ,secret>y4 #fjb4 ,f9ancial crisis responsibility fee 7a7 ,am\nt ,to be collect$ ,9 ord] to recov] ! co/s to ! ,f$]al ,gov]nm5t ( assi/ance provid$ ?r\gh ! ,tr\bl$ ,asset ,relief ,program & o!r ,f$]al programs & activities1 ! ,secret>y1 dur+ ! #aj-ye> p]iod beg9n+ 9 fiscal ye> #bjad & cont9u+ ?r\gh ! end ( fiscal ye> #bjbc1 %all assess a risk-bas$ ,f9ancial ,crisis ,responsibility ,fee t %all collect a total ( #cj1jjj1jjj1jjj1 net ( any e/imat$ corporate income tax d$uctions attributable to ! ,fee1 dur+ t p]iod4 7b7 ,assessm5t & s*$ule 7#a7 ,9 g5]al ,to collect ! fee au?oriz$ by ?is section1 ! ,secret>y %all e/abli%1 by regulation1 an assessm5t s*$ule by fiscal ye>1 includ+ assessm5t base & rates1 t-- 7,a7 is design$1 9 ! ,secret>y's judgm5t1 to result 9 ! collection ( a total ( #cj1jjj1jjj1jjj1 net ( ! e/imat$ corporate income tax d$uction1 by ! end ( fiscal ye> #bjbc2 & 7,b7 %all apply to-- 7i7 a top-ti]$ cov]$ firm1 ) respect to ! gr\p consi/+ ( su* top-ti] cov]$ firm & ea* o!r cov]$ firm controll$ by su* top-ti] cov]$ firm2 & 7ii7 a cov]$ firm1 if su* cov]$ firm is n controll$ by a top-ti] cov]$ firm4 7#b7 ,phase 9 ,to promote ! full recov]y ( ! economy & f9ancial sector1 ! ,secret>y %all phase-9 ! assessm5t rate ov] ! #aj-ye> p]iod1 9 a mann] det]m9$ by ! ,secret>y4 7c7 ,annual adju/m5t ,= ea* fiscal ye>1 />t+ ) fiscal ye> #bjae1 ! ,secret>y-- 7#a7 %all apply ! fee to-- 7,a7 a top-ti]$ cov]$ firm1 ) respect to ! gr\p consi/+ ( su* top-ti] cov]$ firm & ea* o!r cov]$ firm controll$ by su* top-ti] cov]$ firm2 & 7,b7 a cov]$ firm1 if su* cov]$ firm is n controll$ by a top-ti] cov]$ firm2 & 7#b7 %all adju/ ! rates "u ?is subsection 9 a mann] t is design$1 9 ! judgm5t ( ! ,secret>y1 to result 9 ! collection ( a total ( #cj1jjj1jjj1jjj1 net ( ! e/imat$ corporate income tax d$uction1 by ! end ( fiscal ye> #bjbc4 7d7 ,ext5sion ( ! f9ancial crisis responsibility fee 7#a7 ,9 g5]al ,if ! e/imat$ co/ ( ! ,tr\bl$ ,asset ,relief ,program1 z project$ 9 ! ,fiscal ,ye> #bjbd ,budget ( ! ,u4,s4 ,gov]nm5t1 exce$s ! total fee collections receiv$ z ( ! end ( ,fiscal ,ye> #bjbc1 ! ,secret>y %all ext5d ! op]ation ( ! ,fee beyond ! end ( fiscal ye> #bjbc 9 ord] to collect su* excess am\nt4 7#b7 ,assessm5t s*$ule "u ext5sion ,9 ord] to collect1 by ! end ( fiscal ye> #bjbh1 ! excess am\nt det]m9$ "u p>agraph 7d71 ! ,secret>y %all e/abli%1 by regulation1 an assessm5t s*$ule1 includ+ assessm5t base & rates1 t-- 7,a7 is design$1 9 ! judgm5t ( ! ,secret>y1 to result 9 ! collection ( su* excess am\nt by ! end ( fiscal ye> #bjbh2 & 7,b7 %all apply to-- 7i7 a top-ti]$ cov]$ firm1 ) respect to ! gr\p consi/+ ( su* top-ti] cov]$ firm & ea* o!r cov]$ firm controll$ by su* top-ti] cov]$ firm2 & 7ii7 a cov]$ firm1 if su* cov]$ firm is n controll$ by a top-ti] cov]$ firm4 7#c7 ,annual adju/m5t ,= ea* fiscal ye>1 />t+ ) fiscal ye> #bjbd1 ! ,secret>y-- 7,a7 %all apply ! fee requir$ by ?is section to-- 7i7 a top-ti]$ cov]$ firm1 ) respect to ! gr\p consi/+ ( su* top-ti] cov]$ firm & ea* o!r cov]$ firm controll$ by su* top-ti] cov]$ firm2 & 7ii7 a cov]$ firm1 if su* cov]$ firm is n controll$ by a top-ti] cov]$ firm2 & 7,b7 %all adju/ ! rates "u ?is subsection 9 a mann] t is design$1 9 ! judgm5t ( ! ,secret>y1 to result 9 ! collection ( su* excess am\nt z may be det]m9$ "u ?is section by ! end ( fiscal ye> #bjbh4 7e7 ,deposit ( collections ,all am\nts collect$ pursuant to ! fee1 dur+ fiscal ye> #bjad & ea* fiscal ye> !reaft] 7includ+ dur+ ! ext5sion p]iod1 if applicable7-- 7#a7 %all be deposit$ & cr$it$ z g5]al rev5ue ( ! ,treasury = ! purposes ( deficit r$uction2 & 7#b7 %all n be available = obligation4 #fjc4 ,o!r provisions 7a7 ,assi/ance ) assessm5t & collection ,! appropriate ,f$]al ag5cies %all respond promptly to any reque/ = in=mation or assi/ance f ! ,secret>y ) reg>d to ! det]m9ation or collection ( any ,fee to be det]m9$ or impos$ "u ?is ,act4 7b7 ,sev]ability2 rule ( con/ruction ,x is ! int5t ( ,congress t ! provisions ( ?is ,act be sev]able1 & be con/ru$ to avoid ! con/itutional invalidity ( any provision ( ! ,act or any application ( any provision ( ! ,act to any p]son or circum/ance4 ,if a provision ( ?is ,act is held invalid1 all valid provisions %all rema9 9 effect4 ,if a provision ( ?is ,act is held invalid 9 "o or m ( its applications to any p]son or circum/ance1 ! ,act %all rema9 9 effect 9 all its valid applications4 ,9 any *all5ge to ! con/itutionality ( any provision ( ?is ,act1 a review+ c\rt %all con/rue su* provision z necess>y to avoid any con/itutional invalidity4 ,,vii ,tax on trad+ transactions #gja4 ,transaction tax 7a7 ,9 g5]al ,*apt] #cf ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] sub*apt] ,b ! foll[+ new sub*apt]3 ,c ,tax on ,trad+ ,transactions ,sec4 #ddge4 ,tax on trad+ transactions4 #ddge4 ,tax on trad+ transactions 7a7 ,imposition ( tax ,!re is h]eby impos$ a tax on ea* cov]$ transaction ) respect to any security4 7b7 ,rate ( tax ,! tax impos$ "u subsection 7a7 ) respect to any cov]$ transaction %all be #j4jc p]c5t ( ! specifi$ base am\nt ) respect to su* cov]$ transaction4 7c7 ,specifi$ base am\nt ,= purposes ( ?is section1 ! t]m specifi$ base am\nt means-- 7#a7 except z provid$ 9 p>agraph 7#b71 ! fair m>ket value ( ! security 7det]m9$ z ( ! "t ( ! cov]$ transaction71 & 7#b7 9 ! case ( any paym5t describ$ 9 subsection 7h71 ! am\nt ( su* paym5t4 7d7 ,cov]$ transaction ,= purposes ( ?is section1 ! t]m cov]$ transaction means-- 7#a7 except z provid$ 9 p>agraph 7#b71 any pur*ase if-- 7,a7 su* pur*ase occurs or is cle>$ on a facility locat$ 9 ! ,unit$ ,/ates1 or 7,b7 ! pur*as] or sell] is a ,unit$ ,/ates p]son1 & 7#b7 any transaction ) respect to a security describ$ 9 subp>agraph 7,d71 7,e71 or 7,f7 ( subsection 7e77#a71 if-- 7,a7 su* security is trad$ or cle>$ on a facility locat$ 9 ! ,unit$ ,/ates1 or 7,b7 any p>ty ) rights "u su* security is a ,unit$ ,/ates p]son4 7e7 ,security & o!r def9itions ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m security means-- 7,a7 any %>e ( /ock 9 a corporation1 7,b7 any p>tn]%ip or b5eficial own]%ip int]e/ 9 a p>tn]%ip or tru/1 7,c7 any note1 bond1 deb5ture1 or o!r evid5ce ( indebt$ness1 7,d7 any evid5ce ( an int]e/ 91 or a d]ivative f9ancial in/rum5t ) respect to1 any security or securities describ$ 9 subp>agraph 7,a71 7,b71 or 7,c71 7,e7 any d]ivative f9ancial in/rum5t ) respect to any curr5cy or commodity1 & 7,f7 any notional pr9cipal contract4 7#b7 ,d]ivative f9ancial in/rum5t ,! t]m d]ivative f9ancial in/rum5t includes any option1 =w>d contract1 futures contract1 or any simil> f9ancial in/rum5t4 7#c7 ,notional pr9cipal contract ,except z o!rwise provid$ by ! ,secret>y1 ! t]m notional pr9cipal contract means any f9ancial in/rum5t :i* requires two or m paym5ts at specifi$ int]vals calculat$ by ref]5ce to a specifi$ index ^u "o or m notional pr9cipal am\nts4 ,an am\nt %all n fail to be treat$ z a paym5t describ$ 9 ! prec$+ s5t5ce m]ely because su* am\nt is fix$ on "o date & paid or o!rwise tak5 into acc\nt on a diff]5t date4 7#d7 ,specifi$ index ,! t]m specifi$ index means any #a or m ( any comb9ation (-- 7,a7 a fix$ rate1 price1 or am\nt1 or 7,b7 a v>iable rate1 price1 or am\nt1 7,c7 any index bas$ on any objectively det]m9able in=mation 7includ+ ! occurr5ce or nonoccurr5ce ( any ev5t7 :i* is n )9 ! control ( any ( ! p>ties to ! in/rum5t & is n unique to any ( ! p>ties' circum/ances1 & 7,d7 any o!r index z ! ,secret>y may prescribe4 7#e7 ,treatm5t ( ex*anges 7,a7 ,9 g5]al ,an ex*ange %all be treat$ z ! sale ( ! prop]ty transf]r$ & a pur*ase ( ! prop]ty receiv$ by ea* p>ty to ! ex*ange4 7,b7 ,c]ta9 deem$ ex*anges ,9 ! case ( a di/ribution treat$ z an ex*ange = /ock "u section #cjb or #cca1 ! corporation mak+ su* di/ribution %all be treat$ z hav+ pur*as$ su* /ock = purposes ( ?is section4 7f7 ,exceptions 7#a7 ,exception = initial issues ,no tax %all be impos$ "u subsection 7a7 on any cov]$ transaction ) respect to ! initial issuance ( any security describ$ 9 subp>agraph 7,a71 7,b71 or 7,c7 ( subsection 7e77#a74 7#b7 ,exception = c]ta9 trad$ %ort-t]m indebt$ness ,a note1 bond1 deb5ture1 or o!r evid5ce ( indebt$ness :i*-- 7,a7 is trad$ on a trad+ facility locat$ 9 ! ,unit$ ,/ates1 & 7,b7 has a fix$ maturity ( n m ?an #ajj days1 %all n be treat$ z describ$ 9 subsection 7e77#a77;,c74 7#c7 ,exception = securities l5d+ arrangem5ts ,no tax %all be impos$ "u subsection 7a7 on any cov]$ transaction ) respect to :i* ga9 or loss is n recogniz$ by reason ( section #ajeh4 7g7 ,by :om paid 7#a7 ,9 g5]al ,! tax impos$ by ?is section %all be paid by-- 7,a7 9 ! case ( a transaction :i* occurs or is cle>$ on a facility locat$ 9 ! ,unit$ ,/ates1 su* facility1 & 7,b7 9 ! case ( a pur*ase n describ$ 9 subp>agraph 7,a7 :i* is execut$ by a brok] 7z def9$ 9 section #fjde7;c77#a77 :i* is a ,unit$ ,/ates p]son1 su* brok]4 7#b7 ,special rules = direct1 etc41 transactions ,9 ! case ( any transaction to :i* p>agraph 7#a7 does n apply1 ! tax impos$ by ?is section %all be paid by-- 7,a7 9 ! case ( a transaction describ$ 9 subsection 7d77#a7-- 7i7 ! pur*as] if ! pur*as] is a ,unit$ ,/ates p]son1 & 7ii7 ! sell] if ! pur*as] is n a ,unit$ ,/ates p]son1 & 7,b7 9 ! case ( a transaction describ$ 9 subsection 7d77#b7-- 7i7 ! payor if ! payor is a ,unit$ ,/ates p]son1 & 7ii7 ! payee if ! payor is n a ,unit$ ,/ates p]son4 7h7 ,c]ta9 paym5ts treat$ z sep>ate transactions ,except z o!rwise provid$ by ! ,secret>y1 any paym5t ) respect to a security describ$ 9 subp>agraph 7,d71 7,e71 or 7,f7 ( subsection 7e77#a7 %all be treat$ z a sep>ate transaction = purposes ( ?is section1 includ+-- 7#a7 any net initial paym5t1 net f9al or t]m9at+ paym5t1 or net p]iodical paym5t ) respect to a notional pr9cipal contract 7or simil> f9ancial in/rum5t71 7#b7 any paym5t ) respect to any =w>d contract 7or simil> f9ancial in/rum5t71 & 7#c7 any premium paid ) respect to any option 7or simil> f9ancial in/rum5t74 7i7 ,application to transactions by controll$ =eign corporations 7#a7 ,9 g5]al ,= purposes ( ?is section1 a controll$ =eign corporation %all be treat$ z a ,unit$ ,/ates p]son4 7#b7 ,special rules = paym5t ( tax on direct1 etc41 transactions ,9 ! case ( any transaction :i* is a cov]$ transaction solely by reason ( p>agraph 7#a7 & :i* is n describ$ 9 subsection 7g77#a7-- 7,a7 ,paym5t by ,unit$ ,/ates %>ehold]s ,any tax :i* w\ld 7b = ?is p>agraph7 be payable "u subsection 7g77#b7 by ! controll$ =eign corporation %all1 9 lieu !re(1 be paid by ! ,unit$ ,/ates %>ehold]s ( su* controll$ =eign corporation z provid$ 9 subp>agraph 7,b74 7,b7 ,pro rata %>es ,ea* su* ,unit$ ,/ates %>ehold] %all pay ! same proportion ( su* tax z-- 7i7 ! /ock :i* su* ,unit$ ,/ates %>ehold] owns 7)9 ! mean+ ( section #ieh7;a77 9 su* controll$ =eign corporation1 be>s to 7ii7 ! /ock s own$ by all ,unit$ ,/ates %>ehold]s 9 su* controll$ =eign corporation4 7,c7 ,def9itions ,= purposes ( ?is subsection1 ! t]ms ,unit$ ,/ates %>ehold] & controll$ =eign corporation h ! mean+s giv5 su* t]ms 9 sections #iea7;b7 & #ieg7;a71 respectively4 7j7 ,adm9i/ration ,! ,secret>y %all c>ry out ?is section 9 consultation ) ! ,securities & ,ex*ange ,commission & ! ,commodity ,futures ,trad+ ,commission4 7k7 ,guidance2 regulations ,! ,secret>y %all-- 7#a7 provide guidance reg>d+ su* in=mation report+ conc]n+ cov]$ transactions z ! ,secret>y deems appropriate1 & 7#b7 prescribe su* regulations z are necess>y or appropriate to prev5t avoidance ( ! purposes ( ?is section1 includ+ ! use ( non-,unit$ ,/ates p]sons 9 su* transactions4 4 7b7 ,cr$it ) respect to c]ta9 tax-,favor$ acc\nts ,to (fset transaction tax 7#a7 ,9 g5]al ,subp>t ,c ( "p ,,iv ( sub*apt] ,a ( *apt] #a ( su* ,code is am5d$ by ins]t+ aft] section #cf;,b ! foll[+ new section3 #cf;,c4 ,(fset = transaction tax ) respect to c]ta9 tax-favor$ acc\nts 7a7 ,9 g5]al ,!re %all be all[$ z a cr$it aga9/ ! tax impos$ by ?is subtitle = ! taxable ye> an am\nt equal to #j4jc p]c5t ( ! qualifi$ tax-favor$ acc\nt contributions ( ! taxpay] = ! taxable ye>4 7b7 ,qualifi$ tax-,favor$ acc\nt contributions ,= purposes ( ?is section1 ! t]m qualifi$ tax-favor$ acc\nt contributions means1 ) respect to any taxable ye>1 ! sum (-- 7#a7 ) respect to qualifi$ retirem5t plans 7z def9$ 9 section #digd7;c77 ( ! taxpay]1 ! am\nt contribut$ to su* plans = su* taxable ye> to ! ext5t t su* contributions are all[able z a d$uction or are excludable f gross income 7or1 9 ! case ( a ,ro? ,,ira 7z def9$ 9 section #djh;,a7b771 ! am\nt contribut$71 7#b7 ) respect to ,ar*] ,m,s,as ( ! taxpay]1 ! am\nt all[$ z a d$uction "u section #bbj = su* taxable ye>1 7#c7 ) respect to heal? sav+s acc\nts ( ! taxpay]1 ! am\nt all[$ z a d$uction "u section #bbc = su* taxable ye>1 plus 7#d7 ) respect to qualifi$ tuition programs 7z def9$ 9 section #ebi7 & ,cov]dell education sav+s acc\nts 7z def9$ 9 section #ecj7 ) respect to :i* ! taxpay] is ! designat$ b5efici>y 7or1 9 ! case ( a designat$ b5efici>y ) respect to :om ano!r taxpay] is all[$ a d$uction "u section #aea1 su* o!r taxpay] 9 lieu ( su* designat$ b5efici>y71 ! am\nt contribut$ = su* taxable ye>4 4 7#b7 ,con=m+ am5dm5ts 7,a7 ,section #acbd7;b77#b7 ( title #ca1 ,unit$ ,/ates ,code1 is am5d$ by ins]t+ 1 #cf;,c aft] #cf;,b4 7,b7 ,! table ( sections = subp>t ,c ( "p ,,iv ( sub*apt] ,a ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ be=e ! item relat+ to section #cg ! foll[+ new item3 ,sec4 #cf;,c4 ,(fset = transaction tax on contributions to c]ta9 tax-favor$ acc\nts4 4 7c7 ,in=mation report+ ) respect to controll$ =eign corporations ,subp>agraph 7,b7 ( section #fjch7;a77#a7 is am5d$ by ins]t+ & transactions :i* are cov]$ transactions = purposes ( section #ddge by reason ( ! application ( section #ddge7;i77#a7 to su* corporation be=e ! semicolon at ! end4 7d7 ,cl]ical am5dm5t ,! table ( sub*apt]s = *apt] #cf ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] ! item relat+ to sub*apt] ,b ! foll[+ new item3 ,sub*apt] ,c4 ,tax on trad+ transactions4 4 7e7 ,effective date ,! am5dm5ts made by ?is section %all apply to transactions aft] ,decemb] #ca1 #bjac4 ,,viii ,modification ( acc\nt+ rules #hja4 ,repeal ( la/-91 fir/-out me?od ( inv5tory 7a7 ,9 g5]al ,subp>t ,d ( "p ,,ii ( sub*apt] ,e ( *apt] #a is am5d$ by /rik+ sections #dgb 7relat+ to la/-91 fir/-out inv5tories71 #dgc 7relat+ to qualifi$ liquidations ( ,,lifo inv5tories71 & #dgd 7relat+ to simplifi$ doll>-value ,,lifo me?od = c]ta9 small bus9esses74 7b7 ,con=m+ am5dm5ts 7#a7 7,a7 ,section #cab7n7 is am5d$ by /rik+ p>agraph 7#d7 & by r$esignat+ p>agraphs 7#e7 ?r\gh 7#h7 z p>agraphs 7#d7 ?r\gh 7#g71 respectively4 7,b7 ,section #cab7n77#g71 z r$esignat$ by subp>agraph 7,a71 is am5d$-- 7i7 by /rik+ p>agraphs 7#d7 & 7#f7 9 subp>agraph 7,a7 & ins]t+ p>agraph 7#e71 & 7ii7 by /rik+ p>agraph 7#e7 9 subp>agraph 7,b7 & ins]t+ p>agraph 7#d74 7,c7 ,section #ef7;g77#d77;,d7 is am5d$ by /rik+ clause 7iii7 & by r$esignat+ clause 7iv7 z clause 7iii74 7#b7 ,section #acfc is am5d$ by /rik+ subsection 7d74 7c7 ,effective date 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 7#b7 ,*ange 9 me?od ( acc\nt+ ,9 ! case ( any taxpay] requir$ by ! am5dm5ts made by ?is section to *ange its me?od ( acc\nt+ = its fir/ taxable ye> beg9n+ aft] ! date ( ! enactm5t ( ?is ,act-- 7,a7 su* *ange %all be treat$ z initiat$ by ! taxpay]1 7,b7 su* *ange %all be treat$ z made ) ! cons5t ( ! ,secret>y ( ! ,treasury1 & 7,c7 if ! net am\nt ( ! adju/m5ts requir$ to be tak5 into acc\nt by ! taxpay] "u section #dha ( ! ,int]nal ,rev5ue ,code ( #aihf is positive1 su* am\nt %all be tak5 into acc\nt ov] a p]iod ( #h ye>s beg9n+ ) su* fir/ taxable ye>4 #hjb4 ,repeal ( l[] ( co/ or m>ket me?od ( inv5tory 7a7 ,9 g5]al ,section #dga is am5d$ by r$esignat+ subsection 7c7 z subsection 7d7 & by ins]t+ aft] subsection 7b7 ! foll[+ new subsection3 7c7 ,inv5tories tak5 into acc\nt at co/ ,a me?od ( det]m9+ inv5tories %all n be treat$ z cle>ly reflect+ income unless su* me?od provides t inv5tories %all be tak5 into acc\nt at co/4 4 7b7 ,effective date 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 7#b7 ,*ange 9 me?od ( acc\nt+ ,9 ! case ( any taxpay] requir$ by ! am5dm5ts made by ?is section to *ange its me?od ( acc\nt+ = its fir/ taxable ye> beg9n+ aft] ! date ( ! enactm5t ( ?is ,act-- 7,a7 su* *ange %all be treat$ z initiat$ by ! taxpay]1 7,b7 su* *ange %all be treat$ z made ) ! cons5t ( ! ,secret>y ( ! ,treasury1 & 7,c7 if ! net am\nt ( ! adju/m5ts requir$ to be tak5 into acc\nt by ! taxpay] "u section #dha ( ! ,int]nal ,rev5ue ,code ( #aihf is positive1 su* am\nt %all be tak5 into acc\nt ov] a p]iod ( #h ye>s beg9n+ ) su* fir/ taxable ye>4 ,,ix ,fair treatm5t ( options #ija4 ,consi/5t treatm5t ( /ock options by corporations 7a7 ,consi/5t treatm5t = wage d$uction 7#a7 ,9 g5]al ,section #hc7;h7 is am5d$-- 7,a7 by /rik+ ,9 ! case ( & ins]t+3 7#a7 ,9 g5]al ,9 ! case ( 1 & 7,b7 by add+ at ! end ! foll[+ new p>agraph3 7#b7 ,/ock options ,9 ! case ( prop]ty transf]r$ to a p]son 9 connection ) a /ock option1 any d$uction relat$ to su* /ock option %all be all[$ only "u section #afb7q7 & p>agraph 7#a7 %all n apply4 4 7#b7 ,treatm5t ( comp5sation paid ) /ock options ,section #afb is am5d$ by r$esignat+ subsection 7q7 z subsection 7r7 & by ins]t+ aft] subsection 7p7 ! foll[+ new subsection3 7q7 ,treatm5t ( comp5sation paid ) /ock options 7#a7 ,9 g5]al ,9 ! case ( comp5sation = p]sonal s]vices t is paid ) /ock options1 ! d$uction "u subsection 7a77#a7 %all n exce$ ! am\nt ! taxpay] has treat$ z comp5sation co/ ) respect to su* /ock options = ! purpose ( asc]ta9+ income1 pr(it1 or loss 9 a report or /atem5t to %>ehold]s1 p>tn]s1 or o!r proprietors 7or to b5efici>ies71 & %all be tak5 into acc\nt 9 ! same p]iod t su* comp5sation co/ is recogniz$ = su* purpose4 7#b7 ,special rules = controll$ gr\ps ,! ,secret>y may prescribe rules = ! application ( p>agraph 7#a7 9 cases :]e ! /ock option is grant$ by-- 7,a7 a p>5t or subsidi>y corporation 7)9 ! mean+ ( section #dbd7 ( ! taxpay]1 or 7,b7 ano!r corporation4 4 7b7 ,consi/5t treatm5t = rese>* tax cr$it ,section #da7;b77#b77;,d7 is am5d$ by ins]t+ at ! end ! foll[+ new clause3 7iv7 ,special rule = /ock options ,! am\nt :i* may be treat$ z wages = any taxable ye> 9 connection ) ! issuance ( a /ock option %all n exce$ ! am\nt all[$ = su* taxable ye> z a comp5sation d$uction "u section #afb7q7 ) respect to su* /ock option4 4 7c7 ,application ( am5dm5ts ,! am5dm5ts made by ?is section %all apply to /ock options ex]cis$ aft] ! date ( ! enactm5t ( ?is ,act1 except t-- 7#a7 su* am5dm5ts %all n apply to /ock options t 7 grant$ be=e su* date & t ve/$ 9 taxable p]iods beg9n+ on or be=e ,june #ae1 #bjje1 7#b7 = /ock options t 7 grant$ be=e su* date ( enactm5t & ve/$ dur+ taxable p]iods beg9n+ aft] ,june #ae1 #bjje1 & end+ be=e su* date ( enactm5t1 a d$uction "u section #afb7q7 ( ! ,int]nal ,rev5ue ,code ( #aihf 7z add$ by subsection 7a77#b77 %all be all[$ 9 ! fir/ taxable p]iod ( ! taxpay] t ends aft] su* date ( enactm5t1 7#c7 = public entities report+ z small bus9ess issu]s & = non-public entities requir$ to file public reports ( f9ancial condition1 p>agraphs 7#a7 & 7#b7 %all be appli$ by sub/itut+ ,decemb] #ae1 #bjje = ,june #ae1 #bjje1 & 7#d7 no d$uction %all be all[$ "u section #hc7;h7 or section #afb7q7 ( su* ,code ) respect to any /ock option ! ve/+ date ( :i* is *ang$ to accel]ate ! "t at :i* ! option may be ex]cis$ 9 ord] to avoid ! applicability ( su* am5dm5ts4 #ijb4 ,application ( executive pay d$uction limit 7a7 ,9 g5]al ,subp>agraph 7,d7 ( section #afb7m77#d7 is am5d$ to read z foll[s3 7,d7 ,/ock option comp5sation ,! t]m applicable employee remun]ation %all include any comp5sation d$uct$ "u subsection 7q71 & su* comp5sation %all n qualify z p]=mance-bas$ comp5sation "u subp>agraph 7,c74 4 7b7 ,effective date ,! am5dm5t made by ?is section %all apply to /ock options ex]cis$ or grant$ aft] ! date ( ! enactm5t ( ?is ,act4