,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #dchc  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,novemb] #ad1         
#bjag,mr4 ,biggs introduc$ ! foll[+     
bill2 :i* 0 ref]r$ to ! ,committee on   
,ways & ,means  ,a ,,bill  ,to re=m !   
,int]nal ,rev5ue ,code ( #aihf4  #a4    
,cl>ification  7a7 ,am5dm5t ( #aihf     
,code ,except z o!rwise expressly       
provid$1 :5ev] 9 ?is ,act an am5dm5t or 
repeal is express$ 9 t]ms ( an am5dm5t  
to1 or repeal (1 a section or o!r       
provision1 ! ref]5ce %all be consid]$ to
 be made to a section or o!r provision (
 ! ,int]nal ,rev5ue ,code ( #aihf4  7b7 
,table ( cont5ts ,! table ( cont5ts =   
?is title is z foll[s3 ,section #a4     
,cl>ification4 ,title ,i--,imm$iate co/ 
recov]y ,sec4 #aja4 ,repeal ( c]ta9     
limitations on ! exp5s+ ( section #agi  
prop]ty4 ,sec4 #ajb4 ,election ( %ort]  
recov]y p]iod = purpose ( det]m9+       
depreciation d$uction4 ,title           
,,ii--,r$uc$ rate on bus9ess income     
,sec4 #bja4 ,r$uc$ corporate rate4 ,sec4

 #bjb4 ,r$uc$ rate on o!r bus9ess       
income4 ,title ,,iii--,exemption sy/em =
 taxation ( =eign income ,sec4 #cja4    
,d$uction = divid5ds receiv$ by dome/ic 
corporations f c]ta9 =eign corporations4
 ,sec4 #cjb4 ,treatm5t ( def]r$ =eign   
income ^u transition to p>ticipation    
exemption sy/em ( taxation4 ,sec4 #cjc4 
,look-?ru rule = relat$ controll$ =eign 
corporations made p]man5t4 ,sec4 #cjd4  
,repeal ( section #ijb indirect =eign   
tax cr$its2 det]m9ation ( section #ifj  
cr$it on curr5t ye> basis4 ,title       
,,iv--,r$uc$ rates = individuals ,sec4  
#dja4 ,r$uc$ rates = individuals4 ,title
 ,v--,tax-exempt reorganizations ,sec4  
#eja4 ,no taxable ev5t = *ange (        
corporate =m4 ,title ,,vi--,repeal ( net
 inve/m5t income tax ,sec4 #fja4 ,repeal
 ( net inve/m5t income tax4 ,title      
,,vii--,repeal ( e/ate tax ,sec4 #gja4  
,repeal ( e/ate tax & ret5tion ( basis  
/ep-up4  ,i ,imm$iate co/ recov]y  #aja4
 ,repeal ( c]ta9 limitations on ! exp5s+
 ( section #agi prop]ty  7a7 ,9 g5]al   

,section #agi is am5d$ by /rik+         
subsections 7b7 & 7e7 & by r$esignat+   
subsections 7c71 7d71 & 7f7 z           
subsections 7b71 7c71 & 7d71            
respectively4  7b7 ,con=m+ am5dm5ts     
7#a7 ,subsection 7c7 ( section #agi1 z  
r$esignat$ by subsection 7a71 is am5d$  
by /rik+ p>agraphs 7#f7 & 7#h71 & by    
r$esignat+ p>agraphs 7#g71 7#i71 & 7#aj7
 z p>agraphs 7#f71 7#g71 & 7#h71        
respectively4  7#b7 ,p>agraph 7#f7 (    
section #agi7;c71 z r$esignat$ by       
p>agraph 7#a7 & subsection 7a71 is am5d$
 by /rik+ p>agraphs 7#b7 & 7#f7 & ins]t+
 p>agraph 7#b74  7#c7 ,section          
#db7;d77#b77;,b77i7 is am5d$ by /rik+   
section #agi7;d77#b7 & ins]t+ section   
#agi7;c77#b74  7#d7 ,subclause 7,i7 (   
section #db7;d77#b77;,d77iii7 is am5d$--
  7,a7 by /rik+ section #agi7;d7 &      
ins]t+ section #agi7;c72 &  7,b7 by     
/rik+ section #agi7;d77#g7 & ins]t+     
section #agi7;c77#f74  7c7 ,effective   
date ,! am5dm5ts made by ?is section    
%all apply to prop]ty plac$ 9 s]vice    

dur+ taxable ye>s beg9n+ aft] ,decemb]  
#ca1 #bjaf4  #ajb4 ,election ( %ort]    
recov]y p]iod = purpose ( det]m9+       
depreciation d$uction  7a7 ,9 g5]al     
,section #afh is am5d$ by add+ at ! end 
! foll[+ new subsection3  7o7 ,election 
( %ort] recov]y p]iod  7#a7 ,9 g5]al    
,not)/&+ subsections 7c71 7e71 7g71 &   
7j71 = purposes ( subsection 7a71 !     
applicable recov]y p]iod = any prop]ty  
plac$ 9 s]vice dur+ a taxable ye> end+  
on or aft] ! date ( ! enactm5t ( ?is    
subsection %all n exce$ su* p]iod z !   
taxpay] may elect ) respect to su*      
prop]ty4  7#b7 ,election ,an election   
made "u ?is subsection %all be made at  
su* "t & 9 su* =m & mann] z ! ,secret>y 
may require4 ,an election "u ?is        
subsection1 once made1 %all apply to !  
taxable ye> = :i* made & all subsequ5t  
taxable ye>s unless revok$ ) ! cons5t ( 
! ,secret>y4  7#c7 ,transition rule ,9 !
 case ( any prop]ty plac$ 9 s]vice dur+ 
a taxable ye> end+ be=e ,janu>y #a1     
#bjag1 p>agraph 7#a7 %all apply )       

respect to ! adju/$ basis ( su* prop]ty 
9 ! same mann] z if su* prop]ty 7) su*  
adju/$ basis7 7 plac$ 9 s]vice on ! fir/
 day ( ! taxable ye> :i* includes       
,janu>y #a1 #bjag4 ,! application ( ?is 
p>agraph %all n be treat$ z a *ange 9   
me?od ( acc\nt+ = purposes ( section    
#dha4  4  7b7 ,effective date ,! am5dm5t
 made by ?is section %all apply to      
prop]ty plac$ 9 s]vice be=e1 on1 or aft]
 ,janu>y #a1 #bjag4  ,,ii ,r$uc$ rate on
 bus9ess income  #bja4 ,r$uc$ corporate 
rate  7a7 ,9 g5]al ,section #aa7;b7 is  
am5d$ to read z foll[s3  7b7 ,am\nt (   
tax ,! am\nt ( ! tax impos$ by          
subsection 7a7 %all be #ae p]c5t (      
taxable income4  4  7b7 ,con=m+ am5dm5ts
 ,p>agraphs 7#a71 7#b71 & 7#f7 ( section
 #adde7;e7 are ea* am5d$ by /rik+ #ce   
p]c5t & ins]t+ #ae p]c5t4  7c7          
,effective date  7#a7 ,9 g5]al ,except z
 o!rwise provid$ 9 ?is subsection1 !    
am5dm5ts made by ?is section %all apply 
to taxable ye>s beg9n+ aft] ,decemb]    
#ca1 #bjaf4  7#b7 ,c]ta9 con=m+ am5dm5ts

 ,! am5dm5ts made by subsection 7b7 %all
 apply to transf]s1 dispositions1 &     
di/ributions1 aft] su* date4  #bjb4     
,r$uc$ rate on o!r bus9ess income  7a7  
,9 g5]al ,section #a is am5d$ by add+ at
 ! end ! foll[+ new subsection3  7j7    
,maximum rate on bus9ess income  7#a7 ,9
 g5]al ,! rate ( tax impos$ "u ?is      
section on bus9ess income %all n exce$  
#ae p]c5t4  7#b7 ,bus9ess income ,! t]m 
bus9ess income means ! excess 7if any7  
(-- 7,a7 any di/ributional or pro rata  
%>e ( items ( income or ga9 f a p>tn]%ip
 or ,s corporation & any income or ga9  
prop]ly allocable to a sole             
proprietor%ip1 ov]  7,b7 any            
di/ributional or pro rata %>e ( items ( 
d$uction or loss f a p>tn]%ip or ,s     
corporation & any d$uction or loss      
prop]ly allocable to a sole             
proprietor%ip4  4  7b7 ,effective date  
,! am5dm5t made by ?is section %all     
apply to taxable ye>s beg9n+ aft]       
,decemb] #ca1 #bjaf4  ,,iii ,exemption  
sy/em = taxation ( =eign income  #cja4  

,d$uction = divid5ds receiv$ by dome/ic 
corporations f c]ta9 =eign corporations 
7a7 ,9 g5]al ,"p ,,viii ( sub*apt] ,b ( 
*apt] #a is am5d$ by ins]t+ aft] section
 #bde ! foll[+ new section3  #bde;,a4   
,divid5ds receiv$ by dome/ic            
corporations f c]ta9 =eign corporations 
7a7 ,9 g5]al ,9 ! case ( any divid5d    
receiv$ f a specifi$ #aj-p]c5t own$     
=eign corporation by a dome/ic          
corporation :i* is a ,unit$ ,/ates      
%>ehold] ) respect to su* =eign         
corporation1 !re %all be all[$ z a      
d$uction an am\nt equal to #ie p]c5t ( !
 =eign-s\rce portion ( su* divid5d4  7b7
 ,specifi$ #aj-,p]c5t own$ =eign        
corporation ,= purposes ( ?is section1 !
 t]m specifi$ #aj-p]c5t own$ =eign      
corporation means any =eign corporation 
if any dome/ic corporation owns         
directly1 or indirectly ?r\gh a *a9 (   
own]%ip describ$ "u section #ieh7;a71   
#aj p]c5t or m ( ! vot+ /ock ( su* =eign
 corporation4  7c7 ,=eign-,s\rce portion
 ,= purposes ( ?is section-- 7#a7 ,9    

g5]al ,! =eign-s\rce portion ( any      
divid5d is an am\nt :i* be>s ! same     
ratio to su* divid5ds z--  7,a7 !       
po/-#aihf undi/ribut$ =eign e>n+s1 be>s 
to  7,b7 ! total po/-#aihf undi/ribut$  
e>n+s4  7#b7 ,po/-#aihf undi/ribut$     
e>n+s ,! t]m po/-#aihf undi/ribut$ e>n+s
 means ! am\nt ( ! e>n+s & pr(its ( !   
specifi$ #aj-p]c5t own$ =eign           
corporation 7comput$ 9 accordance )     
sections #ifd7;a7 & #ihf7 accumulat$ 9  
taxable ye>s beg9n+ aft] ,decemb] #ca1  
#aihf--  7,a7 z ( ! close ( ! taxable   
ye> ( ! specifi$ #aj-p]c5t own$ =eign   
corporation 9 :i* ! divid5d is          
di/ribut$1 &  7,b7 )\t dim9ution by     
reason ( divid5ds di/ribut$ dur+ su*    
taxable ye>4  7#c7 ,po/-#aihf           
undi/ribut$ =eign e>n+s ,! t]m po/-#aihf
 undi/ribut$ =eign e>n+s means ! portion
 ( ! po/-#aihf undi/ribut$ e>n+s :i* is 
attributable to nei!r--  7,a7 income    
describ$ 9 subp>agraph 7,a7 ( section   
#bde7;a77#e71 nor  7,b7 divid5ds        
describ$ 9 subp>agraph 7,b7 ( su*       

section 7det]m9$ )\t reg>d to section   
#bde7;a77#ab774  7#d7 ,treatm5t (       
di/ributions f e>n+s be=e #aihg  7,a7 ,9
 g5]al ,9 ! case ( any divid5d paid out 
( e>n+s & pr(its ( ! specifi$ #aj-p]c5t 
own$ =eign corporation 7comput$ 9       
accordance ) sections #ifd7;a7 & #ihf7  
accumulat$ 9 taxable ye>s beg9n+ be=e   
,janu>y #a1 #aihg--  7i7 p>agraphs 7#a71
 7#b71 & 7#c7 %all be appli$ )\t reg>d  
to ! phrase po/-#aihf ea* place x       
appe>s1 &  7ii7 p>agraph 7#b7 %all be   
appli$ )\t reg>d to ! phrase 9 taxable  
ye>s beg9n+ aft] ,decemb] #ca1 #aihf4   
7,b7 ,divid5ds paid fir/ out ( po/-#aihf
 e>n+s ,divid5ds %all be treat$ z paid  
out ( po/-#aihf undi/ribut$ e>n+s to !  
ext5t !re(4  7d7 ,disall[ance ( =eign   
tax cr$it1 etc  7#a7 ,9 g5]al ,no cr$it 
%all be all[$ "u section #ija = any     
taxes paid or accru$ 7or treat$ z paid  
or accru$7 ) respect to any divid5d =   
:i* a d$uction is all[$ "u ?is section4 
7#b7 ,d5ial ( d$uction ,no d$uction %all
 be all[$ "u ?is *apt] = any tax = :i*  

cr$it is n all[able "u section #ija by  
reason ( p>agraph 7#a7 7det]m9$ by      
treat+ ! taxpay] z hav+ elect$ ! b5efits
 ( subp>t ,a ( "p ,,iii ( sub*apt] ,n74 
7e7 ,regulations ,! ,secret>y may       
prescribe su* regulations or o!r        
guidance z may be necess>y or           
appropriate to c>ry out ! provisions (  
?is section4  4  7b7 ,application (     
hold+ p]iod requirem5t ,subsection 7c7 (
 section #bdf is am5d$-- 7#a7 by /rik+  
or #bde 9 p>agraph 7#a7 & ins]t+ #bde1  
or #bde;,a2 &  7#b7 by add+ at ! end !  
foll[+ new p>agraph3  7#e7 ,special     
rules = =eign s\rce portion ( divid5ds  
receiv$ f specifi$ #aj-p]c5t own$ =eign 
corporations  7,a7 #f-mon? hold+ p]iod  
requirem5t ,= purposes ( section        
#bde;,a--  7i7 p>agraph 7#a77;,a7 %all  
be appli$-- 7,i7 by sub/itut+ #ahj days 
= #de days ea* place x appe>s1 &  7,,ii7
 by sub/itut+ #cfa-;day p]iod = #ia-;day
 p]iod1 &  7ii7 p>agraph 7#b7 %all n    
apply4  7,b7 ,/atus mu/ be ma9ta9$ dur+ 
hold+ p]iod ,= purposes ( section       

#bde;,a1 ! hold+ p]iod requirem5t ( ?is 
subsection %all be treat$ z met only    
if--  7i7 ! specifi$ #aj-p]c5t own$     
corporation ref]r$ to 9 section         
#bde;,a7a7 is a specifi$ #aj-p]c5t own$ 
corporation at all times dur+ su* p]iod1
 &  7ii7 ! taxpay] is a ,unit$ ,/ates   
%>ehold] ) respect to su* specifi$      
#aj-p]c5t own$ corporation at all times 
dur+ su* p]iod4  4  7c7 ,application (  
rules g5]ally applicable to d$uctions = 
divid5ds receiv$  7#a7 ,treatm5t (      
divid5ds f c]ta9 corporations ,p>agraph 
7#a7 ( section #bdf7;a7 is am5d$ by     
/rik+ & #bde & ins]t+ #bde1 & #bde;,a4  
7#b7 ,assets g5]at+ tax-exempt portion (
 divid5d n tak5 into acc\nt 9 allocat+ &
 apportion+ d$uctible exp5ses ,p>agraph 
7#c7 ( section #hfd7;e7 is am5d$ by     
/rik+ or #bde7;a7 & ins]t+ 1 #bde7;a71  
or #bde;,a4  7#c7 ,coord9ation ) section
 #ajei ,subp>agraph 7,b7 ( section      
#ajei7;b77#b7 is am5d$ by /rik+ or #bde 
& ins]t+ #bde1 or #bde;,a4  7d7         
,coord9ation ) =eign tax cr$it          

limitation ,subsection 7b7 ( section    
#ijd1 z am5d$ by ! prec$+ provisions (  
?is ,act1 is am5d$ by r$esignat+        
p>agraph 7#b7 z p>agraph 7#a7 & by add+ 
at ! end ! foll[+ new p>agraph3  7#b7   
,treatm5t ( divid5ds = :i* d$uction is  
all[$ "u section #bde;,a ,= purposes (  
subsection 7a71 9 ! case ( a dome/ic    
corporation :i* is a ,unit$ ,/ates      
%>ehold] ) respect to a specifi$        
#aj-p]c5t own$ =eign corporation1 su*   
dome/ic corporation's taxable income f  
s\rces )\t ! ,unit$ ,/ates %all be      
det]m9$ )\t reg>d to--  7,a7 !          
=eign-s\rce portion ( any divid5d       
receiv$ f su* =eign corporation1 &  7,b7
 any d$uctions prop]ly allocable to su* 
portion4  ,any t]m :i* is us$ 9 section 
#bde;,a & 9 ?is p>agraph %all h ! same  
mean+ = purposes ( ?is p>agraph z :5 us$
 9 su* section4  4  7e7 ,con=m+ am5dm5ts
  7#a7 ,p>agraph 7#d7 ( section #bde7;a7
 is am5d$ by /rik+ section #ijb7;c77#a7 
& ins]t+ section #bde;,a7c77#b74  7#b7  
,subsection 7b7 ( section #iea is am5d$ 

by /rik+ subp>t & ins]t+ title4  7#c7   
,subsection 7a7 ( section #ieg is am5d$ 
by /rik+ subp>t 9 ! matt] prec$+        
p>agraph 7#a7 & ins]t+ title4  7#d7 ,!  
table ( sections = "p ,,viii ( sub*apt] 
,b ( *apt] #a is am5d$ by ins]t+ aft] ! 
item relat+ to section #bde ! foll[+ new
 item3  ,sec4 #bde;,a4 ,divid5ds receiv$
 by dome/ic corporations f c]ta9 =eign  
corporations4  4  7f7 ,effective date ,!
 am5dm5ts made by ?is section %all apply
 to taxable ye>s ( =eign corporations   
beg9n+ aft] ,decemb] #ca1 #bjaf1 & to   
taxable ye>s ( ,unit$ ,/ates %>ehold]s 9
 :i* or ) :i* su* taxable ye>s ( =eign  
corporations end4  #cjb4 ,treatm5t (    
def]r$ =eign income ^u transition to    
p>ticipation exemption sy/em ( taxation 
7a7 ,9 g5]al ,section #ife is am5d$ to  
read z foll[s3  #ife4 ,treatm5t ( def]r$
 =eign income ^u transition to          
p>ticipation exemption sy/em ( taxation 
7a7 ,treatm5t ( def]r$ =eign income z   
subp>t ,f income ,9 ! case ( ! la/      
taxable ye> ( a def]r$ =eign income     

corporation :i* beg9s be=e ,decemb] #ca1
 #bjaf1 ! subp>t ,f income ( su* =eign  
corporation 7z o!rwise det]m9$ = su*    
taxable ye> "u section #ieb7 %all be    
increas$ by ! accumulat$ po/-#aihf      
def]r$ =eign income ( su* corporation   
det]m9$ z ( ! close ( su* taxable ye>4  
7b7 ,r$uction 9 am\nts includ$ 9 gross  
income ( ,unit$ ,/ates %>ehold]s (      
specifi$ =eign corporations ) deficits 9
 e>n+s & pr(its  7#a7 ,9 g5]al ,9 ! case
 ( a taxpay] :i* is a ,unit$ ,/ates     
%>ehold] ) respect to at lea/ "o def]r$ 
=eign income corporation & at lea/ "o   
,e,p deficit =eign corporation1 ! am\nt 
:i* w\ld 7b = ?is subsection7 be tak5   
into acc\nt "u section #iea7;a77#a7 by  
reason ( subsection 7a7 z su* ,unit$    
,/ates %>ehold]'s pro rata %>e ( !      
subp>t ,f income ( ea* def]r$ =eign     
income corporation %all be r$uc$ 7b n   
bel[ z]o7 by ! am\nt ( su* ,unit$ ,/ates
 %>ehold]'s aggregate =eign ,e,p deficit
 :i* is allocat$ "u p>agraph 7#b7 to su*
 def]r$ =eign income corporation4  7#b7 

,allocation ( aggregate =eign ,e,p      
deficit ,! aggregate =eign ,e,p deficit 
( any ,unit$ ,/ates %>ehold] %all be    
allocat$ among ! def]r$ =eign income    
corporations ( su* ,unit$ ,/ates        
%>ehold] 9 an am\nt :i* be>s ! same     
proportion to su* aggregate z--  7,a7   
su* ,unit$ ,/ates %>ehold]'s pro rata   
%>e ( ! accumulat$ po/-#aihf def]r$     
=eign income ( ea* su* def]r$ =eign     
income corporation1 be>s to  7,b7 !     
aggregate ( su* ,unit$ ,/ates %>ehold]'s
 pro rata %>e ( ! accumulat$ po/-#aihf  
def]r$ =eign income ( all def]r$ =eign  
income corporations ( su* ,unit$ ,/ates 
%>ehold]4  7#c7 ,def9itions relat$ to   
,e,p deficits ,= purposes ( ?is         
subsection-- 7,a7 ,aggregate =eign ,e,p 
deficit ,! t]m aggregate =eign ,e,p     
deficit means1 ) respect to any ,unit$  
,/ates %>ehold]1 ! aggregate ( su*      
%>ehold]'s pro rata %>es ( ! specifi$   
,e,p deficits ( ! ,e,p deficit =eign    
corporations ( su* %>ehold]4  7,b7 ,e,p 
deficit =eign corporation ,! t]m ,e,p   

deficit =eign corporation means1 )      
respect to any taxpay]1 any specifi$    
=eign corporation ) respect to :i* su*  
taxpay] is a ,unit$ ,/ates %>ehold]1    
if--  7i7 su* specifi$ =eign corporation
 has a deficit 9 po/-#aihf e>n+s &      
pr(its1 &  7ii7 z ( ,decemb] #ca1       
#bjaf--  7,i7 su* corporation 0 a       
specifi$ =eign corporation1 &  7,,ii7   
su* taxpay] 0 a ,unit$ ,/ates %>ehold] (
 su* corporation4  7,c7 ,specifi$ ,e,p  
deficit ,! t]m specifi$ ,e,p deficit    
means1 ) respect to any ,e,p deficit    
=eign corporation1 ! am\nt ( ! deficit  
ref]r$ to 9 subp>agraph 7,b74  7c7      
,r$uc$ rate on includ$ income ,9 ! case 
( a ,unit$ ,/ates %>ehold] ( a def]r$   
=eign income corporation1 !re %all be   
all[$ z a d$uction = ! taxable ye> 9 :i*
 an am\nt is includ$ 9 ! gross income ( 
su* ,unit$ ,/ates %>ehold] "u section   
#iea7;a77#a7 by reason ( ?is section an 
am\nt equal to #hh4f p]c5t ( ! am\nt s  
includ$ z gross income4  7d7 ,def]r$    
=eign income corporation2 accumulat$    

po/-#aihf def]r$ =eign income ,=        
purposes ( ?is section-- 7#a7 ,def]r$   
=eign income corporation ,! t]m def]r$  
=eign income corporation means1 )       
respect to any ,unit$ ,/ates %>ehold]1  
any specifi$ =eign corporation ( su*    
,unit$ ,/ates %>ehold] :i* has          
accumulat$ po/-#aihf def]r$ =eign income
 7z ( ! close ( ! taxable ye> ref]r$ to 
9 subsection 7a77 great] ?an z]o4  7#b7 
,accumulat$ po/-#aihf def]r$ =eign      
income ,! t]m accumulat$ po/-#aihf      
def]r$ =eign income means ! po/-#aihf   
e>n+s & pr(its except to ! ext5t su*    
e>n+s-- 7,a7 are attributable to income 
( ! specifi$ =eign corporation :i* is   
effectively connect$ ) ! conduct ( a    
trade or bus9ess )9 ! ,unit$ ,/ates &   
subject to tax "u ?is *apt]1  7,b7 if   
di/ribut$1 w\ld-- 7i7 9 ! case ( a      
controll$ =eign corporation1 be exclud$ 
f ! gross income ( a ,unit$ ,/ates      
%>ehold] "u section #iei1 or  7ii7 9 !  
case ( any passive =eign inve/m5t       
company 7z def9$ 9 section #abig7 o!r   

?an a controll$ =eign corporation1 be   
treat$ z a di/ribution :i* is n a       
divid5d1 or  7,c7 9 ! case ( any passive
 =eign inve/m5t company 7z s def9$71 is 
prop]ly attributable to an unrev]s$     
inclusion ( a ,unit$ ,/ates p]son "u    
section #abif4  ,to ! ext5t provid$ 9   
regulations or o!r guidance prescrib$ by
 ! ,secret>y1 9 ! case ( any controll$  
=eign corporation :i* has %>ehold]s :i* 
are n ,unit$ ,/ates %>ehold]s1          
accumulat$ po/-#aihf def]r$ =eign income
 %all be appropriately r$uc$ by am\nts  
:i* w\ld be describ$ 9 subp>agraph      
7,b77i7 is su* %>ehold]s 7 ,unit$ ,/ates
 %>ehold]s4 ,su* regulations or o!r     
guidance may provide a simil> rule =    
purposes ( subp>agraph 7,b77ii7 & 7,c74 
7#c7 ,po/-#aihf e>n+s & pr(its ,! t]m   
po/-#aihf e>n+s & pr(its means ! e>n+s &
 pr(its ( ! =eign corporation 7comput$ 9
 accordance ) sections #ifd7;a7 & #ihf7 
accumulat$ 9 taxable ye>s beg9n+ aft]   
,decemb] #ca1 #aihf1 & det]m9$--  7,a7 z
 ( ! close ! taxable ye> ref]r$ to 9    

subsection 7a71 &  7,b7 )\t dim9ution by
 reason ( divid5ds di/ribut$ dur+ su*   
taxable ye>4  7e7 ,specifi$ =eign       
corporation  7#a7 ,9 g5]al ,= purposes (
 ?is section1 ! t]m specifi$ =eign      
corporation means-- 7,a7 any controll$  
=eign corporation1 &  7,b7 any section  
#ijb corporation 7z def9$ 9 section     
#iji7;d77#e774  7#b7 ,application to    
section #ijb corporations ,= purposes ( 
section #iea1 a section #ijb corporation
 7z s def9$7 %all be treat$ z a         
controll$ =eign corporation solely =    
purposes ( tak+ into acc\nt ! subp>t ,f 
income ( su* corporation "u subsection  
7a7 7& = purposes ( apply+ subsection   
7f774  7f7 ,det]m9ations ( pro rata %>e 
,= purposes ( ?is section1 ! det]m9ation
 ( any ,unit$ ,/ates %>ehold]'s pro rata
 %>e ( any am\nt ) respect to any       
specifi$ =eign corporation %all be      
det]m9$ "u rules simil> to ! rules (    
section #iea7;a77#b7 by treat+ su* am\nt
 9 ! same mann] z subp>t ,f income 7& by
 treat+ su* specifi$ =eign corporation z

 a controll$ =eign corporation74  7g7   
,disall[ance ( =eign tax cr$it1 etc     
7#a7 ,9 g5]al ,no cr$it %all be all[$ "u
 section #ija = #hh4f p]c5t ( any taxes 
paid or accru$ 7or treat$ z paid or     
accru$7 ) respect to any am\nt = :i* a  
d$uction is all[$ "u ?is section4  7#b7 
,d5ial ( d$uction ,no d$uction %all be  
all[$ "u ?is *apt] = any tax = :i* cr$it
 is n all[able "u section #ija by reason
 ( p>agraph 7#a7 7det]m9$ by treat+ !   
taxpay] z hav+ elect$ ! b5efits ( subp>t
 ,a ( "p ,,iii ( sub*apt] ,n74  7#c7    
,coord9ation ) section #gh ,section #gh 
%all n apply to any tax = :i* cr$it is n
 all[able "u section #ija by reason (   
p>agraph 7#a74  7h7 ,election ,to pay   
liability 9 in/allm5ts  7#a7 ,9 g5]al ,9
 ! case ( a ,unit$ ,/ates %>ehold] ( a  
def]r$ =eign income corporation1 su*    
,unit$ ,/ates %>ehold] may elect to pay 
! net tax liability "u ?is section 9 #h 
in/allm5ts ( ! foll[+ am\nts3  7,a7 #h  
p]c5t ( ! net tax liability 9 ! case (  
ea* ( ! fir/ #e ( su* in/allm5ts1  7,b7 

#ae p]c5t ( ! net tax liability 9 ! case
 ( ! #f? su* in/allm5t1  7,c7 #bj p]c5t 
( ! net tax liability 9 ! case ( ! #g?  
su* in/allm5t1 &  7,d7 #be p]c5t ( ! net
 tax liability 9 ! case ( ! #h? su*     
in/allm5t4  7#b7 ,date = paym5t (       
in/allm5ts ,if an election is made "u   
p>agraph 7#a71 ! fir/ in/allm5t %all be 
paid on ! due date 7det]m9$ )\t reg>d to
 any ext5sion ( "t = fil+ ! return7 = ! 
return ( tax = ! taxable ye> describ$ 9 
subsection 7b7 & ea* succe$+ in/allm5t  
%all be paid on ! due date 7z s det]m9$7
 = ! return ( tax = ! taxable ye> foll[+
 ! taxable ye> ) respect to :i* ! prec$+
 in/allm5t 0 made4  7#c7 ,accel]ation ( 
paym5t ,if !re is an addition to tax =  
failure to pay timely assess$ ) respect 
to any in/allm5t requir$ "u ?is         
subsection1 a liquidation or sale (     
sub/antially all ! assets ( ! taxpay]   
7includ+ 9 a title #aa or simil> case71 
a cessation ( bus9ess by ! taxpay]1 or  
any simil> circum/ance1 !n ! unpaid     
portion ( all rema9+ in/allm5ts %all be 

due on ! date ( su* ev5t 7or 9 ! case ( 
a title #aa or simil> case1 ! day be=e !
 petition is fil$74 ,! prec$+ s5t5ce    
%all n apply to ! sale ( sub/antially   
all ! assets ( a taxpay] to a buy] if   
su* buy] ent]s into an agreem5t ) !     
,secret>y "u :i* su* buy] is liable = ! 
rema9+ in/allm5ts due "u ?is subsection 
9 ! same mann] z if su* buy] 7 !        
taxpay]4  7#d7 ,proration ( defici5cy to
 in/allm5ts ,if an election is made "u  
p>agraph 7#a7 to pay ! net tax liability
 "u ?is section 9 in/allm5ts & a        
defici5cy has be5 assess$ ) respect to  
su* net tax liability1 ! defici5cy %all 
be prorat$ to ! in/allm5ts payable "u   
p>agraph 7#a74 ,! "p ( ! defici5cy s    
prorat$ to any in/allm5t ! date = paym5t
 ( :i* has n arriv$ %all be collect$ at 
! same "t z1 & z a "p (1 su* in/allm5t4 
,! "p ( ! defici5cy s prorat$ to any    
in/allm5t ! date = paym5t ( :i* has     
arriv$ %all be paid ^u notice & dem& f !
 ,secret>y4 ,?is subsection %all n apply
 if ! defici5cy is due to neglig5ce1 to 

int5tional disreg>d ( rules &           
regulations1 or to fraud ) int5t to     
evade tax4  7#e7 ,election ,any election
 "u p>agraph 7#a7 %all be made n lat]   
?an ! due date = ! return ( tax = !     
taxable ye> describ$ 9 subsection 7a7 & 
%all be made 9 su* mann] z ! ,secret>y  
may provide4  7#f7 ,net tax liability "u
 ?is section ,= purposes ( ?is          
subsection-- 7,a7 ,9 g5]al ,! net tax   
liability "u ?is section ) respect to   
any ,unit$ ,/ates %>ehold] is ! excess  
7if any7 (--  7i7 su* taxpay]'s net     
income tax = ! taxable ye> describ$ 9   
subsection 7a71 ov]  7ii7 su* taxpay]'s 
net income tax = su* taxable ye> det]m9$
 )\t reg>d to ?is section4  7,b7 ,net   
income tax ,! t]m net income tax means !
 regul> tax liability r$uc$ by ! cr$its 
all[$ "u subp>ts ,a1 ,b1 & ,d ( "p ,,iv 
( sub*apt] ,a4  7i7 ,special rules = ,s 
corporation %>ehold]s  7#a7 ,9 g5]al ,9 
! case ( any ,s corporation :i* is a    
,unit$ ,/ates %>ehold] ( a def]r$ =eign 
income corporation1 ea* %>ehold] ( su*  

,s corporation may elect to def] paym5t 
( su* %>ehold]'s net tax liability "u   
?is section ) respect to su* ,s         
corporation until ! %>ehold]'s taxable  
ye> :i* includes ! trigg]+ ev5t )       
respect to su* liability4  7#b7 ,trigg]+
 ev5t  7,a7 ,9 g5]al ,9 ! case ( any    
%>ehold]'s net tax liability "u ?is     
section ) respect to any ,s corporation1
 ! trigg]+ ev5t ) respect to su*        
liability is :i*ev] ( ! foll[+ occurs   
fir/3  7i7 ,su* corporation ceases to be
 an ,s corporation 7det]m9$ z ( ! fir/  
day ( ! fir/ taxable ye> t su*          
corporation is n an ,s corporation74    
7ii7 ,a liquidation or sale (           
sub/antially all ! assets ( su* ,s      
corporation 7includ+ 9 a title #aa or   
simil> case71 a cessation ( bus9ess by  
su* ,s corporation1 su* ,s corporation  
ceases to exi/1 or any simil>           
circum/ance4  7iii7 ,a transf] ( any %>e
 ( /ock 9 su* ,s corporation by !       
taxpay] 7includ+ by reason ( dea?1 or   
o!rwise74  7,b7 ,p>tial transf]s ( /ock 

,9 ! case ( a transf] ( less ?an all ( !
 taxpay]'s %>es ( /ock 9 ! ,s           
corporation1 su* transf] %all only be a 
trigg]+ ev5t ) respect to s mu* ( !     
taxpay]'s net tax liability "u ?is      
section ) respect to su* ,s corporation 
z is prop]ly allocable to su* /ock4     
7,c7 ,transf] ( liability ,a transf]    
describ$ 9 clause 7iii7 %all n be treat$
 z a trigg]+ ev5t if ! transf]ee ent]s  
into an agreem5t ) ! ,secret>y "u :i*   
su* transf]ee is liable = net tax       
liability ) respect to su* /ock 9 ! same
 mann] z if su* transf]ee 7 ! taxpay]4  
7#c7 ,net tax liability ,a %>ehold]'s   
net tax liability "u ?is section )      
respect to any ,s corporation is ! net  
tax liability "u ?is section :i* w\ld be
 det]m9$ "u subsection 7h77#f7 if ! only
 subp>t ,f income tak5 into acc\nt by   
su* %>ehold] by reason ( ?is section 7  
allocations f su* ,s corporation4  7#d7 
,election to pay def]r$ liability 9     
in/allm5ts ,9 ! case ( a taxpay] :i*    
elects to def] paym5t "u p>agraph 7#a71 

subsection 7h7 %all be appli$--  7,a7   
sep>ately ) respect to ! liability to   
:i* su* election applies1  7,b7 an      
election "u subsection 7h7 ) respect to 
su* liability %all be treat$ z timely   
made if made n lat] ?an ! due date = !  
return ( tax = ! taxable ye> 9 :i* !    
trigg]+ ev5t ) respect to su* liability 
occurs1  7,c7 ! fir/ in/allm5t "u       
subsection 7h7 ) respect to su*         
liability %all be paid n lat] ?an su*   
due date 7b det]m9$ )\t reg>d to any    
ext5sion ( "t = fil+ ! return71 &  7,d7 
if ! trigg]+ ev5t ) respect to any net  
tax liability is describ$ 9 p>agraph    
7#b77;,a77ii71 an election "u subsection
 7h7 ) respect to su* liability may be  
made only ) ! cons5t ( ! ,secret>y4     
7#e7 ,jo9t & sev]al liability ( ,s      
corporation ,if any %>ehold] ( an ,s    
corporation elects to def] paym5t "u    
p>agraph 7#a71 su* ,s corporation %all  
be jo9tly & sev]ally liable = su* paym5t
 & any p5alty1 addition to tax1 or      
additional am\nt attributable !reto4    

7#f7 ,ext5sion ( limitation on          
collection ,not)/&+ any o!r provision ( 
law1 any limitation on ! "t p]iod = !   
collection ( a liability def]r$ "u ?is  
subsection %all n be treat$ z beg9n+    
be=e ! date ( ! trigg]+ ev5t ) respect  
to su* liability4  7#g7 ,election ,any  
election "u p>agraph 7#a7 %all be made n
 lat] ?an ! due date = ! return ( tax = 
! taxable ye> describ$ 9 subsection 7a7 
& %all be made 9 su* mann] z ! ,secret>y
 may provide4  7j7 ,inclusion ( def]r$  
=eign income "u ?is section n ,to trigg]
 recapture ( ov]all =eign loss ,=       
purposes ( section #ijd7;f77#a71 9 !    
case ( a ,unit$ ,/ates %>ehold] ( a     
def]r$ =eign income corporation1 su*    
,unit$ ,/ates %>ehold]'s taxable income 
f s\rces )\t ! ,unit$ ,/ates %all be    
det]m9$ )\t reg>d to ?is section4  7k7  
,regulations ,! ,secret>y may prescribe 
su* regulations or o!r guidance z may be
 necess>y or appropriate to c>ry out !  
provisions ( ?is section4  4  7b7       
,cl]ical am5dm5t ,! table ( section =   

subp>t ,f ( "p ,,iii ( sub*apt] ,n (    
*apt] #a is am5d$ by /rik+ ! item relat+
 to section #ife & ins]t+ ! foll[+3     
,sec4 #ife4 ,treatm5t ( def]r$ =eign    
income ^u transition to p>ticipation    
exemption sy/em ( taxation4  4  #cjc4   
,look-?ru rule = relat$ controll$ =eign 
corporations made p]man5t  7a7 ,9 g5]al 
,p>agraph 7#f7 ( section #ied7;c7 is    
am5d$ by /rik+ subp>agraph 7,c74  7b7   
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s (    
=eign corporations beg9n+ aft] ,decemb] 
#ca1 #bjaf1 & to taxable ye>s ( ,unit$  
,/ates %>ehold]s 9 :i* or ) :i* su*     
taxable ye>s ( =eign corporations end4  
#cjd4 ,repeal ( section #ijb indirect   
=eign tax cr$its2 det]m9ation ( section 
#ifj cr$it on curr5t ye> basis  7a7     
,repeal ( section #ijb indirect =eign   
tax cr$its ,subp>t ,a ( "p ,,iii (      
sub*apt] ,n ( *apt] #a is am5d$ by /rik+
 section #ijb4  7b7 ,det]m9ation (      
section #ifj cr$it on curr5t ye> basis  
,section #ifj is am5d$--  7#a7 by /rik+ 

subsection 7c71 by r$esignat+ subsection
 7b7 z subsection 7c71 by /rik+ all t   
prec$es subsection 7c7 7z s r$esignat$7 
& ins]t+ ! foll[+3  #ifj4 ,deem$ paid   
cr$it = subp>t ,f inclusions  7a7 ,9    
g5]al ,= purposes ( ?is subp>t1 if !re  
is includ$ 9 ! gross income ( a dome/ic 
corporation any item ( income "u section
 #iea7;a77#a7 ) respect to any controll$
 =eign corporation ) respect to :i* su* 
dome/ic corporation is a ,unit$ ,/ates  
%>ehold]1 su* dome/ic corporation %all  
be deem$ to h paid s mu* ( su* =eign    
corporation's =eign income taxes z are  
prop]ly attributable to ! item ( income 
s includ$4  7b7 ,special rules =        
di/ributions f previ\sly tax$ e>n+s &   
pr(its ,= purposes ( ?is subp>t-- 7#a7  
,9 g5]al ,if any portion ( a di/ribution
 f a controll$ =eign corporation to a   
dome/ic corporation :i* is a ,unit$     
,/ates %>ehold] ) respect to su*        
controll$ =eign corporation is exclud$ f
 gross income "u section #iei7;a71 su*  
dome/ic corporation %all be deem$ to h  

paid s mu* ( su* =eign corporation's    
=eign income taxes z--  7,a7 are prop]ly
 attributable to su* portion1 &  7,b7 h 
n be5 deem$ to h to be5 paid by su*     
dome/ic corporation "u ?is section = any
 prior taxable ye>4  7#b7 ,ti]$         
controll$ =eign corporations ,if section
 #iei7;b7 applies to any portion ( a    
di/ribution f a controll$ =eign         
corporation to ano!r controll$ =eign    
corporation1 su* controll$ =eign        
corporation %all be deem$ to h paid s   
mu* ( su* o!r controll$ =eign           
corporation's =eign income taxes z--    
7,a7 are prop]ly attributable to su*    
portion1 &  7,b7 h n be5 deem$ to h be5 
paid by a dome/ic corporation "u ?is    
section = any prior taxable ye>4  2     
7#b7 & by add+ aft] subsection 7c7 7z s 
r$esignat$7 ! foll[+ new subsections3   
7d7 ,=eign income taxes ,! t]m =eign    
income taxes means any income1 w>       
pr(its1 or excess pr(its taxes paid or  
accru$ to any =eign c\ntry or possession
 ( ! ,unit$ ,/ates4  7e7 ,regulations ,!

 ,secret>y %all provide su* regulations 
z may be necess>y or appropriate to c>ry
 out ! provisions ( ?is section4  4  7c7
 ,con=m+ am5dm5ts  7#a7 ,section #gh is 
am5d$ to read z foll[s3  #gh4 ,gross up 
= deem$ paid =eign tax cr$it ,if a      
dome/ic corporation *ooses to h !       
b5efits ( subp>t ,a ( "p ,,iii (        
sub*apt] ,n 7relat+ to =eign tax cr$it7 
= any taxable ye>1 an am\nt equal to !  
taxes deem$ to be paid by su*           
corporation "u section #ifj 7relat+ to  
deem$ paid cr$it = subp>t ,f inclusions7
 = su* taxable ye> %all be treat$ =     
purposes ( ?is title 7o!r ?an section   
#ifj7 z an item ( income requir$ to be  
includ$ 9 ! gross income ( su* dome/ic  
corporation "u section #iea7;a74  4     
7#b7 ,section #bde7;a77#aj7 is am5d$ by 
/rik+ #ijb14  7#c7 ,sections            
#ece7;b77#a7 & #ede7;b77#a7 are ea*     
am5d$ by /rik+ section #ijb7;a7 or      
#ifj7;a77#a7 & ins]t+ section #ifj4     
7#d7 ,p>agraph 7#a7 ( section #had7;f7  
is am5d$-- 7,a7 by /rik+ subp>agraph    

7,b72 &  7,b7 by /rik+ all t prec$es ,no
 income & ins]t+ ! foll[+3  7#a7        
,treatm5t ( =eign taxes  4  7#e7        
,subp>agraph 7,b7 ( section #hfd7;h77#a7
 is am5d$ by /rik+ #ijb14  7#f7         
,subsection 7a7 ( section #ija is am5d$ 
by /rik+ sections #ijb & #ifj & ins]t+  
section #ifj4  7#g7 ,p>agraph 7#b7 (    
section #ija7;e7 is am5d$ by /rik+ b is 
n limit$ to-- & all t foll[s ?r\gh t    
portion & ins]t+ b is n limit$ to t     
portion4  7#h7 ,subsection 7f7 ( section
 #ija is am5d$ by /rik+ sections #ijb & 
#ifj & ins]t+ section #ifj4  7#i7       
,subp>agraph 7,a7 ( section #ija7;j77#a7
 is am5d$ by /rik+ #ijb or4  7#aj7      
,subp>agraph 7,b7 ( section #ija7;j77#a7
 is am5d$ by /rik+ sections #ijb & #ifj 
& ins]t+ section #ifj4  7#aa7 ,p>agraph 
7#b7 ( section #ija7k7 is am5d$ by /rik+
 #ijb14  7#ab7 ,p>agraph 7#f7 ( section 
#ija7k7 is am5d$ by /rik+ #ijb or4      
7#ac7 ,subp>agraph 7,a7 ( section       
#ijd7;h77#aj7 is am5d$ by /rik+ sections
 #ijb1 #ijg1 & #ifj & ins]t+ sections   

#ijg & #ifj4  7#ad7 ,section #ijd is    
am5d$ by /rik+ subsection 7k74  7#ae7   
,p>agraph 7#a7 ( section #ije7;c7 is    
am5d$ by /rik+ ! la/ s5t5ce4  7#af7     
,subclause 7,i7 ( section               
#ije7;c77#b77;,b77i7 is am5d$ by /rik+  
section #ijb or4  7#ag7 ,subsection 7a7 
( section #ijf is am5d$ by /rik+ 7or    
deem$1 "u section #ijb1 paid or accru$  
dur+ ! taxable ye>74  7#ah7 ,subsection 
7b7 ( section #ijf is am5d$ by /rik+    
p>agraphs 7#d7 & 7#e74  7#ai7           
,subp>agraph 7,b7 ( section #ijg7;b77#b7
 is am5d$ by /rik+ #ijb or4  7#bj7      
,p>agraph 7#c7 ( section #ijg7;c7 is    
am5d$-- 7,a7 by /rik+ subp>agraph 7,a7 &
 r$esignat+ subp>agraphs 7,b7 & 7,c7 z  
subp>agraphs 7,a7 & 7,b71 respectively2 
&  7,b7 by /rik+ section #ifj7;a7 9     
subp>agraph 7,a7 7z s r$esignat$7 &     
ins]t+ section #ifj4  7#ba7 ,p>agraph   
7#e7 ( section #ijg7;c7 is am5d$ by     
/rik+ #ijb or4  7#bb7 ,clause 7i7 (     
section #ijg7;f77#b77;,b7 is am5d$ by   
/rik+ #ijb or4  7#bc7 ,subsection 7a7 ( 

section #ijh is am5d$ by /rik+ #ijb or4 
7#bd7 ,subsection 7b7 ( section #iji is 
am5d$-- 7,a7 by /rik+ section #ijb      
corporation 9 ! matt] prec$+ p>agraph   
7#a7 & ins]t+ specifi$ #aj-p]c5t own$   
=eign corporation2  7,b7 by /rik+ #ijb  
or 9 p>agraph 7#a72  7,c7 by /rik+ by   
su* section #ijb corporation & all t    
foll[s 9 ! matt] foll[+ p>agraph 7#b7 & 
ins]t+ by su* specifi$ #aj-p]c5t own$   
=eign corporation or a dome/ic          
corporation :i* is a ,unit$ ,/ates      
%>ehold] ) respect to su* specifi$      
#aj-p]c5t own$ =eign corporation42 &    
7,d7 by /rik+ section #ijb corporations 
9 ! head+ !re( & ins]t+ specifi$        
#aj-,p]c5t own$ =eign corporations4     
7#be7 ,subsection 7d7 ( section #iji is 
am5d$ by /rik+ p>agraph 7#e74  7#bf7    
,p>agraph 7#a7 ( section #ieh7;a7 is    
am5d$ by /rik+ #ifj7;a77#a7 & ins]t+    
#ifj4  7#bg7 ,subsection 7d7 ( section  
#iei is am5d$ by /rik+ ,except z provid$
 9 section #ifj7;a77#c71 any & ins]t+   
,any4  7#bh7 ,subsection 7e7 ( section  

#iei is am5d$ by /rik+ & section        
#ifj7;b74  7#bi7 ,subp>agraph 7,a7 (    
section #abia7;g77#b7 is am5d$ by /rik+ 
any di/ribution-- & all t foll[s ?r\gh b
 only if & ins]t+ any di/ribution1 any  
)hold+ tax impos$ ) respect to su*      
di/ribution1 b only if4  7#cj7 ,section 
#abic is am5d$ by /rik+ subsection 7f74 
7#ca7 ,subp>agraph 7,b7 ( section       
#fjch7;c77#a7 is am5d$ by /rik+ sections
 #ijb 7relat+ to =eign tax cr$it =      
corporate /ockhold] 9 =eign corporation7
 & #ifj 7relat+ to special rules = =eign
 tax cr$it7 & ins]t+ section #ifj4      
7#cb7 ,p>agraph 7#d7 ( section #fjch7;c7
 is am5d$ by /rik+ subp>agraph 7,c74    
7#cc7 ,! table ( sections = subp>t ,a ( 
"p ,,iii ( sub*apt] ,n ( *apt] #a is    
am5d$ by /rik+ ! item relat+ to section 
#ijb4  7#cd7 ,! table ( sections =      
subp>t ,f ( "p ,,iii ( sub*apt] ,n (    
*apt] #a is am5d$ by /rik+ ! item relat+
 to section #ifj & ins]t+ ! foll[+3     
,sec4 #ifj4 ,deem$ paid cr$it = subp>t  
,f inclusions4  4  7d7 ,effective date  

,! am5dm5ts made by ?is section %all    
apply to taxable ye>s ( =eign           
corporations beg9n+ aft] ,decemb] #ca1  
#bjaf1 & to taxable ye>s ( ,unit$ ,/ates
 %>ehold]s 9 :i* or ) :i* su* taxable   
ye>s ( =eign corporations end4  ,,iv    
,r$uc$ rates = individuals  #dja4 ,r$uc$
 rates = individuals  7a7 ,jo9t returns 
& surviv+ sp\ses ,section #a7;a7 is     
am5d$ by /rik+ 9 accordance ) ! foll[+  
table & all t foll[s & ins]t+ z foll[s3 
#ab p]c5t ( s mu* ( taxable income z    
does n exce$ #ge1cjj1 plus #be p]c5t ( s
 mu* ( taxable income z exce$s #ge1cjj b
 does n exce$ #dff1iej1 plus #bi p]c5t (
 s mu* ( taxable income z exce$s        
#dff1iej44  7b7 ,heads ( h\seholds      
,section #a7;b7 is am5d$ by /rik+ 9     
accordance ) ! foll[+ table & all t     
foll[s & ins]t+ z foll[s3 #ab p]c5t ( s 
mu* ( taxable income z does n exce$     
#ej1djj1 plus #be p]c5t ( s mu* (       
taxable income z exce$s #ej1djj b does n
 exce$ #dda1jjj1 plus #bi p]c5t ( s mu* 
( taxable income z exce$s #dda1jjj44    

7c7 ,s+le ,section #a7;c7 is am5d$ by   
/rik+ 9 accordance ) ! foll[+ table &   
all t foll[s & ins]t+ z foll[s3 #ab     
p]c5t ( s mu* ( taxable income z does n 
exce$ #cg1fej1 plus #be p]c5t ( s mu* ( 
taxable income z exce$s #cg1fej b does n
 exce$ #dae1jej1 plus #bi p]c5t ( s mu* 
( taxable income z exce$s #dae1jej44    
7d7 ,m>ri$ fil+ sep>ately ,section      
#a7;d7 is am5d$ by /rik+ 9 accordance ) 
! foll[+ table & all t foll[s & ins]t+ z
 foll[s3 #ab p]c5t ( s mu* ( taxable    
income z does n exce$ #cg1fej1 plus #be 
p]c5t ( s mu* ( taxable income z exce$s 
#cg1fej b does n exce$ #bcc1dge1 plus   
#bi p]c5t ( s mu* ( taxable income z    
exce$s #bcc1dge44  7e7 ,e/ates & tru/s  
,section #a7;e7 is am5d$ by /rik+ 9     
accordance ) ! foll[+ table & all t     
foll[s & ins]t+ z foll[s3 #ab p]c5t ( s 
mu* ( taxable income z does n exce$s    
#e1jjj1 plus #be p]c5t ( s mu* ( taxable
 income z exce$s #e1jjj b does n exce$  
#aj1jjj1 plus #bi p]c5t ( s mu* (       
taxable income z exce$s #ae1jjj4  7f7   

,inflation adju/m5t ,section #a7;f7 is  
am5d$ by /rik+ by /rik+ p>agraphs 7#g7 &
 7#h7 & ins]t+ ! foll[+ new p>agraph3   
7#g7 ,application to taxable ye>s aft]  
#bjag ,9 prescrib+ tables "u p>agraph   
7#a7 :i* apply to any taxable ye> beg9n+
 9 a cal5d> ye> aft] #bjag1 p>agraph    
7#c7 %all be appli$ by sub/itut+ #bjaf =
 #aiib 9 subp>agraph 7,b7 !re(4  4  7g7 
,repeal ( modifications to sup]c$$ rates
 ,section #a is am5d$ by /rik+          
subsection 7i7 & by r$esignat+          
subsection 7j7 7z add$ by section #bjb7 
z subsection 7i74  7h7 ,effective date  
,! am5dm5ts made by ?is section %all    
apply to taxable ye>s beg9n+ aft]       
,decemb] #ca1 #bjaf4  ,v ,tax-exempt    
reorganizations  #eja4 ,no taxable ev5t 
= *ange ( corporate =m ,not)/&+ any     
provision ( ! ,int]nal ,rev5ue ,code (  
#aihf1 a *ange 9 ! organizational       
/ructure ( a corporation1 h[ev]         
organiz$1 into ano!r organizational     
/ructure is n a taxable ev5t = !        
purposes ( su* ,code if !re is no *ange 

among ! own]s1 _! own]%ip int]e/s1 or ! 
assets ( ! organization 7o!r ?an a de   
m9imus *ange 9 su* assets74 ,! prec$+   
s5t5ce %all apply to *anges 9           
organizational /ructure occurr+ aft]    
,decemb] #ca1 #bjaf4  ,,vi ,repeal ( net
 inve/m5t income tax  #fja4 ,repeal (   
net inve/m5t income tax  7a7 ,9 g5]al   
,subtitle ,a ( ! ,int]nal ,rev5ue ,code 
( #aihf is am5d$ by /rik+ *apt] #b;,a4  
7b7 ,effective date ,! am5dm5t made by  
?is section %all apply to taxable ye>s  
beg9n+ aft] ,decemb] #ca1 #bjaf4  ,,vii 
,repeal ( e/ate tax  #gja4 ,repeal (    
e/ate tax & ret5tion ( basis /ep-up     
,effective = e/ates ( dec$5ts dy+ aft]  
,decemb] #ca1 #bjaf1 *apt] #aa ( !      
,int]nal ,rev5ue ,code ( #aihf is       
repeal$4