,i #aad? ,,congress #b;d ,session ,h4 ,r4 #ebfa ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,may #ag1 #bjaf ,mr4 ,lev9 7= himself1 ,mr4 ,van ,holl51 ,mr4 ,rangel1 ,mr4 ,mc,dermott1 ,mr4 ,?ompson ( ,cali=nia1 ,mr4 ,pascrell1 & ,mr4 ,danny ,k4 ,davis ( ,ill9ois7 introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,ways & ,means ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to prev5t ! avoidance ( ! rules relat$ to inve/m5t ( e>n+s 9 ,unit$ ,/ates prop]ty ?r\gh corporate expatriation or ! use ( corporate /ructures 9 :i* ! common p>5t is a =eign corporation4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,protect+ ! ,u4,s4 ,corporate ,tax ,base ,act ( #bjaf4 #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 ( ! sum (-- 7i7 ! av]age ( ! am\nts ( ,unit$ ,/ates prop]ty held 7directly or indirectly7 by ! controll$ =eign corporation z ( ! close ( ea* qu>t] ( su* taxable ye>1 & 7ii7 9 ! case ( a controll$ =eign corporation :i* is a memb] ( an exp&$ affiliat$ gr\p ! common p>5t ( :i* is n a dome/ic corporation1 ! av]age ( ! am\nts ( =eign gr\p prop]ty 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 7,k7 or 7,l7 ( subsection 7c77#b71 appli$-- 7,i7 by sub/itut+ =eign p]son = ,unit$ ,/ates p]son 9 su* subp>agraphs 7,c71 7,j71 & 7,l71 7,,ii7 by sub/itut+ =eign corporation = dome/ic corporation 9 subsection 7c77#b77,l77i71 & 7,,iii7 by treat+ a =eign p]son z a ,unit$ ,/ates %>ehold] describ$ 9 subsection 7c77#b77,l77ii77,i7 if su* =eign p]son w\ld be s describ$ if su* p]son 7 a ,unit$ ,/ates p]son4 7,c7 ,limitation on treatm5t z a controll$ =eign corporation ,a =eign corporation %all n be treat$ z a controll$ =eign corporation = purposes ( subp>agraph 7,a7 unless m ?an #ej p]c5t ( ! total comb9$ vot+ p[] ( all classes ( /ock ( su* corporation entitl$ to vote1 & m ?an #ej p]c5t ( ! total value ( ! /ock ( su* corporation1 is own$ 7directly or indirectly7 by ,unit$ ,/ates p]sons describ$ 9 subp>agraph 7,a7 or 7,c7 ( section #ggja7;a77#cj74 7,d7 ,=eign p]son ,= purposes ( ?is p>agraph1 ! t]m =eign p]son means any p]son :o is n a ,unit$ ,/ates p]son 7z def9$ 9 section #ggja7;a77#cj774 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$gor or gu>antor ( su* obligation4 4 7d7 ,t]m9ation ( rule :i* p]mits use ( relat$-,p>ty transactions ,to avoid treatm5t z a controll$ =eign corporation ,section #ieh7;b77#d7 ( su* ,code is am5d$ by ins]t+ if su* /ock 0 acquir$ by su* p]son on or be=e ,may #ag1 #bjaf be=e ! p]iod at ! end4 7e7 ,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 7f7 ,effective date 7#a7 ,9 g5]al ,except z provid$ 9 p>agraph 7#b71 ! 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 7#b7 ,t]m9ation ( rule :i* p]mits use ( relat$-p>ty transactions to avoid treatm5t z a controll$ =eign corporation ,! am5dm5t made by subsection 7d7 %all apply to taxable ye>s ( controll$ =eign corporations end+ on or aft] ,may #ag1 #bjaf1 & to taxable ye>s ( ,unit$ ,/ates %>ehold]s 9 :i* or ) :i* su* taxable ye>s ( controll$ =eign corporations end4