,,ii #aaf? ,,congress #a/ ,session ,s4 #ghj ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,m>* #ac1 #bjai,mr4 ,:iteh\se 7= himself & ,mr4 ,van ,holl57 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to provide = curr5t ye> inclusion ( net ,,cfc te/$ income1 & = o!r purposes4 #a4 ,%ort title1 etc 7a7 ,%ort title ,?is ,act may be cit$ z ! ,no ,tax ,breaks = ,outs\rc+ ,act4 7b7 ,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 7c7 ,table ( cont5ts ,! table ( cont5ts ( ?is ,act is z foll[s3 ,sec4 #a4 ,%ort title1 etc4,sec4 #b4 ,curr5t ye> inclusion ( net ,,cfc te/$ income4,sec4 #c4 ,limitation on d$uction ( int]e/ by dome/ic corporations :i* are memb]s ( an int]national f9ancial report+ gr\p4,sec4 #d4 ,modifications to rules relat+ to inv]t$ corporations4,sec4 #e4 ,treatm5t ( =eign corporations manag$ & controll$ 9 ! ,unit$ ,/ates z dome/ic corporations4 #b4 ,curr5t ye> inclusion ( net ,,cfc te/$ income 7a7 ,repeal ( tax-,free deem$ return on inve/m5ts 7#a7 ,9 g5]al ,section #iea;,a7a7 is am5d$ by /rik+ global intangible l[-tax$ income & ins]t+ net ,,cfc te/$ income4 7#b7 ,con=m+ am5dm5ts 7,a7 ,section #iea;,a is am5d$ by /rik+ subsections 7b7 & 7d74 7,b7 ,section #iea;,a7e77#a7 is am5d$ by /rik+ subsections 7b71 7c77#a77;,a71 & & ins]t+ subsections 7c77#a77;,a7 &4 7,c7 ,section #iea;,a7f7 is am5d$ to read z foll[s3 7f7 ,treatm5t z subp>t ,f income = c]ta9 purposes 7#a7 ,9 g5]al ,except z provid$ 9 p>agraph 7#b71 any net ,,cfc te/$ income includ$ 9 gross income "u subsection 7a7 %all be treat$ 9 ! same mann] z an am\nt includ$ "u section #iea7;a77#a77;,a7 = purposes ( apply+ sections #afh7;h77#b77;,b71 #ece7;b77#aj71 #hea7;b71 #ijd7;h77#a71 #iei1 #ifa1 #ifb1 #iic7;a77#a77;,e71 #iif7;f77#a71 #abdh7;b77#a71 #abdh7;d77#a71 #feja7;e77#a77;,c71 #ffed7;d77#b77;,d71 & #ffee7;e77#d74 7#b7 ,exception ,! ,secret>y %all provide rules = ! application ( p>agraph 7#a7 to o!r provisions ( ?is title 9 any case 9 :i* ! det]m9ation ( subp>t ,f income is requir$ to be made at ! level ( ! controll$ =eign corporation4 4 7,d7 ,section #ifj7;d77#b77;,a7 is am5d$ by /rik+ global intangible l[-tax$ income 7z def9$ 9 section #iea;,a7b77 & ins]t+ net ,,cfc te/$ income 7z def9$ 9 section #iea;,a7c774 7b7 ,repeal ( r$uc$ rate ( tax on net ,,cfc te/$ income 7#a7 ,9 g5]al ,"p ,,viii ( sub*apt] ,b ( *apt] #a is am5d$ by /rik+ section #bej 7& by /rik+ ! item relat+ to su* section 9 ! table ( sections ( su* "p74 7#b7 ,con=m+ am5dm5ts 7,a7 ,section #ei;,a7c77#d77;,b77i7 is am5d$ by /rik+ section #agb1 #bde;,a1 or #bej & ins]t+ section #agb or #bde;,a4 7,b7 ,section #agb7;d7 is am5d$ by /rik+ p>agraph 7#i74 7,c7 ,section #bdf7;b77#a7 is am5d$-- 7i7 by /rik+ subsection 7a7 & 7b7 ( section #bde1 & section #bej & ins]t+ & subsection 7a7 & 7b7 ( section #bde2 & 7ii7 by /rik+ subsection 7a7 & 7b7 ( section #bde1 & #bej & ins]t+ & subsection 7a7 & 7b7 ( section #bde4 7,d7 ,section #dfi7;i77#c77;,f77iii7 is am5d$ by /rik+ #bbb1 & #bej & ins]t+ & #bbb4 7c7 ,net ,,cfc te/$ income det]m9$ )\t reg>d to high tax =eign income ,section #iea;,a7c77#b77;,a77i7 is am5d$ by r$esignat+ subclauses 7,,iv7 & 7,v7 z subclauses 7,v7 & 7,,vi71 respectively1 & by ins]t+ aft] subclause 7,,iii7 ! foll[+ new subclause3 7,,iv7 any item ( income subject to an effective rate ( income tax impos$ by a =eign c\ntry great] ?an ! maximum rate ( tax specifi$ 9 section #aa1 4 7d7 ,repeal ( exclusion ( =eign oil & gas extraction income f ! det]m9ation ( te/$ income ,section #iea;,a7c77#b77;,a77i71 z am5d$ by subsection 7c7 is am5d$-- 7#a7 by add+ & at ! end ( subclause 7,,iv72 7#b7 by /rik+ & at ! end ( subclause 7,v7 & ins]t+ ov]2 & 7#c7 by /rik+ subclause 7,,vi74 7e7 ,increase 9 deem$ paid cr$it = taxes prop]ly attributable to te/$ income 7#a7 ,9 g5]al ,section #ifj7;d7 is am5d$ by /rik+ #hj p]c5t (4 7#b7 ,con=m+ am5dm5t ,section #gh is am5d$ by /rik+ 7det]m9$ )\t reg>d to ! phrase 8#hj p]c5t (0 9 subsection 7d77#a7 !re(74 7f7 ,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 ( =eign corporations beg9n+ aft] ,decemb] #ca1 #bjah1 & to taxable ye>s ( ,unit$ ,/ates %>ehold]s 9 :i* or ) :i* su* taxable ye>s ( =eign corporations end4 7#b7 ,repeal ( r$uc$ rate ( tax2 increase 9 deem$ paid cr$it ,! am5dm5ts made by subsection 7b7 & 7e7 %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjah4 #c4 ,limitation on d$uction ( int]e/ by dome/ic corporations :i* are memb]s ( an int]national f9ancial report+ gr\p 7a7 ,9 g5]al ,section #afc is am5d$ by r$esignat+ subsection 7n7 z subsection 7p7 & by ins]t+ aft] subsection 7m7 ! foll[+ new subsection3 7n7 ,limitation on d$uction ( int]e/ by dome/ic corporations 9 int]national f9ancial report+ gr\ps 7#a7 ,9 g5]al ,9 ! case ( any dome/ic corporation :i* is a memb] ( any int]national f9ancial report+ gr\p1 ! d$uction "u ?is *apt] = int]e/ paid or accru$ dur+ ! taxable ye> %all n exce$ ! sum (-- 7,a7 ! all[able p]c5tage ( #aaj p]c5t ( ! excess 7if any7 (-- 7i7 ! am\nt ( su* int]e/ s paid or accru$1 ov] 7ii7 ! am\nt describ$ 9 subp>agraph 7,b71 plus 7,b7 ! am\nt ( int]e/ includible 9 gross income ( su* corporation = su* taxable ye>4 7#b7 ,int]national f9ancial report+ gr\p 7,a7 ,= purposes ( ?is subsection1 ! t]m int]national f9ancial report+ gr\p means1 ) respect to any report+ ye>1 any gr\p ( entities :i*-- 7i7 includes-- 7,i7 at lea/ "o =eign corporation engag$ 9 a trade or bus9ess )9 ! ,unit$ ,/ates1 or 7,,ii7 at lea/ "o dome/ic corporation & "o =eign corporation1 7ii7 prep>es consolidat$ f9ancial /atem5ts ) respect to su* ye>1 & 7iii7 reports 9 su* /atem5ts av]age annual gross receipts 7det]m9$ 9 ! aggregate ) respect to all entities :i* are "p ( su* gr\p7 = ! #c-report+-ye> p]iod end+ ) su* report+ ye> 9 excess ( #ajj1jjj1jjj4 7,b7 ,rules relat+ to det]m9ation ( av]age gross receipts ,= purposes ( subp>agraph 7,a77iii71 rules simil> to ! rules ( section #ddh7;c77#c7 %all apply4 7#c7 ,all[able p]c5tage ,= purposes ( ?is subsection-- 7,a7 ,9 g5]al ,! t]m all[able p]c5tage means1 ) respect to any dome/ic corporation = any taxable ye>1 ! ratio 7express$ z a p]c5tage & n great] ?an #ajj p]c5t7 (-- 7i7 su* corporation's allocable %>e ( ! int]national f9ancial report+ gr\p's report$ net int]e/ exp5se = ! report+ ye> ( su* gr\p :i* ends 9 or ) su* taxable ye> ( su* corporation1 ov] 7ii7 su* corporation's report$ net int]e/ exp5se = su* report+ ye> ( su* gr\p4 7,b7 ,report$ net int]e/ exp5se ,! t]m report$ net int]e/ exp5se means-- 7i7 ) respect to any int]national f9ancial report+ gr\p = any report+ ye>1 ! excess (-- 7,i7 ! aggregate am\nt ( int]e/ exp5se report$ 9 su* gr\p's consolidat$ f9ancial /atem5ts = su* taxable ye>1 ov] 7,,ii7 ! aggregate am\nt ( int]e/ income report$ 9 su* gr\p's consolidat$ f9ancial /atem5ts = su* taxable ye>1 & 7ii7 ) respect to any dome/ic corporation = any report+ ye>1 ! excess (-- 7,i7 ! am\nt ( int]e/ exp5se ( su* corporation report$ 9 ! books & records ( ! int]national f9ancial report+ gr\p :i* are us$ 9 prep>+ su* gr\p's consolidat$ f9ancial /atem5ts = su* taxable ye>1 ov] 7,,ii7 ! am\nt ( int]e/ income ( su* corporation report$ 9 su* books & records4 7,c7 ,allocable %>e ( report$ net int]e/ exp5se ,) respect to any dome/ic corporation :i* is a memb] ( any int]national f9ancial report+ gr\p1 su* corporation's allocable %>e ( su* gr\p's report$ net int]e/ exp5se = any report+ ye> is ! portion ( su* exp5se :i* be>s ! same ratio to su* exp5se z-- 7i7 ! ,,ebitda ( su* corporation = su* report+ ye>1 be>s to 7ii7 ! ,,ebitda ( su* gr\p = su* report+ ye>4 7,d7 ,,ebitda 7i7 ,9 g5]al ,! t]m ,,ebitda means1 ) respect to any report+ ye>1 e>n+s be=e int]e/1 taxes1 depreciation1 & amortization-- 7,i7 z det]m9$ 9 ! int]national f9ancial report+ gr\p's consolidat$ f9ancial /atem5ts = su* ye>1 or 7,,ii7 = purposes ( subp>agraph 7,a77i71 z det]m9$ 9 ! books & records ( ! int]national f9ancial report+ gr\p :i* are us$ 9 prep>+ su* /atem5ts if n det]m9$ 9 su* /atem5ts4 7ii7 ,treatm5t ( disreg>d$ entities ,! ,,ebitda ( any dome/ic corporation %all n fail to include ! ,,ebitda ( any entity :i* is disreg>d$ = purposes ( ?is *apt]4 7iii7 ,treatm5t ( intra-gr\p di/ributions ,! ,,ebitda ( any dome/ic corporation %all be det]m9$ )\t reg>d to any di/ribution receiv$ by su* corporation f any o!r memb] ( ! int]national f9ancial report+ gr\p4 7,e7 ,special rules = non-positive ,,ebitda 7i7 ,non-positive gr\p ,,ebitda ,9 ! case ( any int]national f9ancial report+ gr\p ! ,,ebitda ( :i* is z]o or less1 p>agraph 7#a7 %all n apply to any memb] ( su* gr\p ! ,,ebitda ( :i* is above z]o4 7ii7 ,non-positive entity ,,ebitda ,9 ! case ( any gr\p memb] ! ,,ebitda ( :i* is z]o or less1 p>agraph 7#a7 %all be appli$ )\t reg>d to subp>agraph 7,a7 !re(4 7#d7 ,consolidat$ f9ancial /atem5t ,= purposes ( ?is subsection1 ! t]m consolidat$ f9ancial /atem5t means any consolidat$ f9ancial /atem5t describ$ 9 p>agraph 7#b77;,a77ii7 if su* /atem5t is-- 7,a7 a f9ancial /atem5t :i* is c]tifi$ z be+ prep>$ 9 accordance ) g5]ally accept$ acc\nt+ pr9ciples1 int]national f9ancial report+ /&>ds1 or any o!r comp>able me?od ( acc\nt+ id5tifi$ by ! ,secret>y1 & :i* is-- 7i7 a #aj-,k 7or successor =m71 or annual /atem5t to %>ehold]s1 requir$ to be fil$ ) ! ,unit$ ,/ates ,securities & ,ex*ange ,commission1 7ii7 an audit$ f9ancial /atem5t :i* is us$ =-- 7,i7 cr$it purposes1 7,,ii7 report+ to %>ehold]s1 p>tn]s1 or o!r proprietors1 or to b5efici>ies1 or 7,,iii7 any o!r sub/antial nontax purpose1 b only if !re is no /atem5t describ$ 9 clause 7i71 or 7iii7 fil$ ) any o!r ,f$]al or ,/ate ag5cy = nontax purposes1 b only if !re is no /atem5t describ$ 9 clause 7i7 or 7ii71 or 7,b7 a f9ancial /atem5t :i*-- 7i7 is us$ = a purpose describ$ 9 subclause 7,i71 7,,ii71 or 7,,iii7 ( subp>agraph 7,a77ii71 or 7ii7 fil$ ) any regulatory or gov]nm5tal body 7:e!r dome/ic or =eign7 specifi$ by ! ,secret>y1 b only if !re is no /atem5t describ$ 9 subp>agraph 7,a74 7#e7 ,report+ ye> ,= purposes ( ?is subsection1 ! t]m report+ ye> means1 ) respect to any int]national f9ancial report+ gr\p1 ! ye> ) respect to :i* ! consolidat$ f9ancial /atem5ts are prep>$4 7#f7 ,application to c]ta9 entities 7,a7 ,p>tn]%ips ,except z o!rwise provid$ by ! ,secret>y 9 p>agraph 7#g71 ?is subsection & subsection 7o7 %all apply to any p>tn]%ip :i* is a memb] ( any int]national f9ancial report+ gr\p "u rules simil> to ! rules ( section #afc7;j77#d74 7,b7 ,=eign corporations engag$ 9 trade or bus9ess )9 ! ,unit$ ,/ates ,except z o!rwise provid$ by ! ,secret>y 9 p>agraph 7#g71 any d$uction = int]e/ paid or accru$ by a =eign corporation engag$ 9 a trade or bus9ess )9 ! ,unit$ ,/ates %all be limit$ 9 a mann] consi/5t ) ! pr9ciples ( ?is subsection4 7,c7 ,consolidat$ gr\ps ,= purposes ( ?is subsection1 ! memb]s ( any gr\p t file 7or are requir$ to file7 a consolidat$ return ) respect to ! tax impos$ by *apt] #a = a taxable ye> %all be treat$ z a s+le corporation4 7#g7 ,regulations ,! ,secret>y may issue su* regulations or o!r guidance z are necess>y or appropriate to c>ry out ! purposes ( ?is subsection4 4 7b7 ,c>ry=w>d ( disall[$ int]e/ 7#a7 ,9 g5]al ,section #afc is am5d$ by ins]t+ aft] subsection 7n71 z add$ by subsection 7a71 ! foll[+ new subsection3 7o7 ,c>ry=w>d ( c]ta9 disall[$ int]e/ ,! am\nt ( any int]e/ n all[$ z a d$uction = any taxable ye> by reason ( subsection 7j77#a7 or 7n77#a7 7:i*ev] imposes ! l[] limitation ) respect to su* taxable ye>7 %all be treat$ z int]e/ 7& z bus9ess int]e/ = purposes ( subsection 7j77#a77 paid or accru$ 9 ! succe$+ taxable ye>4 ,int]e/ paid or accru$ 9 any taxable ye> 7det]m9$ )\t reg>d to ! prec$+ s5t5ce7 %all n be c>ri$ pa/ ! fif? taxable ye> foll[+ su* taxable ye>1 det]m9$ by treat+ int]e/ z all[$ z a d$uction on a fir/-91 fir/-out basis4 4 7#b7 ,con=m+ am5dm5ts 7,a7 ,section #afc7;j77#b7 is am5d$ to read z foll[s3 7#b7 ,c>ry=w>d cross-ref]5ce ,= c>ry=w>d treatm5t1 see subsection 7o74 4 7,b7 ,section #afc7;j77#d77;,b77i77,i7 is am5d$ by /rik+ p>agraph 7#b7 & ins]t+ subsection 7o74 7,c7 ,section #cha7;c77#bj7 is am5d$ to read z foll[s3 7#bj7 ,c>ry=w>d ( disall[$ int]e/ ,! c>ryov] ( disall[$ int]e/ describ$ 9 section #afc7o7 to taxable ye>s end+ aft] ! date ( di/ribution or transf]4 4 7,d7 ,section #chb7;d77#c7 is am5d$ to read z foll[s3 7#c7 ,application to c>ry=w>d ( disall[$ int]e/ ,! t]m pre-*ange loss %all include any c>ryov] ( disall[$ int]e/ describ$ 9 section #afc7o7 "u rules simil> to ! rules ( p>agraph 7#a74 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjah4 #d4 ,modifications to rules relat+ to inv]t$ corporations 7a7 ,9 g5]al ,subsection 7b7 ( section #ghgd is am5d$ to read z foll[s3 7b7 ,inv]t$ corporations treat$ z dome/ic corporations 7#a7 ,9 g5]al ,not)/&+ section #ggja7;a77#d71 a =eign corporation %all be treat$ = purposes ( ?is title z a dome/ic corporation if-- 7,a7 su* corporation w\ld be a surrogate =eign corporation if subsection 7a77#b7 7 appli$ by sub/itut+ #hj p]c5t = #fj p]c5t1 or 7,b7 su* corporation is an inv]t$ dome/ic corporation4 7#b7 ,inv]t$ dome/ic corporation ,= purposes ( ?is subsection1 a =eign corporation %all be treat$ z an inv]t$ dome/ic corporation if1 pursuant to a plan 7or a s]ies ( relat$ transactions7-- 7,a7 ! entity completes aft] ,decemb] #bb1 #bjag1 ! direct or indirect acquisition (-- 7i7 sub/antially all ( ! prop]ties held directly or indirectly by a dome/ic corporation1 or 7ii7 sub/antially all ( ! assets (1 or sub/antially all ( ! prop]ties con/itut+ a trade or bus9ess (1 a dome/ic p>tn]%ip1 & 7,b7 aft] ! acquisition1 ei!r-- 7i7 m ?an #ej p]c5t ( ! /ock 7by vote or value7 ( ! entity is held-- 7,i7 9 ! case ( an acquisition ) respect to a dome/ic corporation1 by =m] %>ehold]s ( ! dome/ic corporation by reason ( hold+ /ock 9 ! dome/ic corporation1 or 7,,ii7 9 ! case ( an acquisition ) respect to a dome/ic p>tn]%ip1 by =m] p>tn]s ( ! dome/ic p>tn]%ip by reason ( hold+ a capital or pr(its int]e/ 9 ! dome/ic p>tn]%ip1 or 7ii7 ! managem5t & control ( ! exp&$ affiliat$ gr\p :i* includes ! entity occurs1 directly or indirectly1 prim>ily )9 ! ,unit$ ,/ates1 & su* exp&$ affiliat$ gr\p has significant dome/ic bus9ess activities4 7#c7 ,exception = corporations ) sub/antial bus9ess activities 9 =eign c\ntry ( organization ,a =eign corporation describ$ 9 p>agraph 7#b7 %all n be treat$ z an inv]t$ dome/ic corporation if aft] ! acquisition ! exp&$ affiliat$ gr\p :i* includes ! entity has sub/antial bus9ess activities 9 ! =eign c\ntry 9 :i* or "u ! law ( :i* ! entity is creat$ or organiz$ :5 comp>$ to ! total bus9ess activities ( su* exp&$ affiliat$ gr\p4 ,= purposes ( subsection 7a77#b77;,b77iii7 & ! prec$+ s5t5ce1 ! t]m sub/antial bus9ess activities %all h ! mean+ giv5 su* t]m "u regulations 9 effect on ,decemb] #bb1 #bjag1 except t ! ,secret>y may issue regulations increas+ ! ?re%old p]c5t 9 any ( ! te/s "u su* regulations = det]m9+ if bus9ess activities con/itute sub/antial bus9ess activities = purposes ( ?is p>agraph4 7#d7 ,managem5t & control ,= purposes ( p>agraph 7#b77;,b77ii7-- 7,a7 ,9 g5]al ,! ,secret>y %all prescribe regulations = purposes ( det]m9+ cases 9 :i* ! managem5t & control ( an exp&$ affiliat$ gr\p is to be treat$ z occurr+1 directly or indirectly1 prim>ily )9 ! ,unit$ ,/ates4 ,! regulations prescrib$ "u ! prec$+ s5t5ce %all apply to p]iods aft] ,decemb] #bb1 #bjag4 7,b7 ,executive (fic]s & s5ior managem5t ,su* regulations %all provide t ! managem5t & control ( an exp&$ affiliat$ gr\p %all be treat$ z occurr+1 directly or indirectly1 prim>ily )9 ! ,unit$ ,/ates if sub/antially all ( ! executive (fic]s & s5ior managem5t ( ! exp&$ affiliat$ gr\p :o ex]cise day-to-day responsibility = mak+ decisions involv+ /rategic1 f9ancial1 & op]ational policies ( ! exp&$ affiliat$ gr\p are bas$ or prim>ily locat$ )9 ! ,unit$ ,/ates4 ,individuals :o 9 fact ex]cise su* day-to-day responsibilities %all be treat$ z executive (fic]s & s5ior managem5t reg>dless ( _! title4 7#e7 ,significant dome/ic bus9ess activities ,= purposes ( p>agraph 7#b77;,b77ii71 an exp&$ affiliat$ gr\p has significant dome/ic bus9ess activities if at lea/ #be p]c5t (-- 7,a7 ! employees ( ! gr\p are bas$ 9 ! ,unit$ ,/ates1 7,b7 ! employee comp5sation incurr$ by ! gr\p is incurr$ ) respect to employees bas$ 9 ! ,unit$ ,/ates1 7,c7 ! assets ( ! gr\p are locat$ 9 ! ,unit$ ,/ates1 or 7,d7 ! income ( ! gr\p is d]iv$ 9 ! ,unit$ ,/ates1 det]m9$ 9 ! same mann] z su* det]m9ations are made = purposes ( det]m9+ sub/antial bus9ess activities "u regulations ref]r$ to 9 p>agraph 7#c7 z 9 effect on ,decemb] #bb1 #bjag1 b appli$ by treat+ all ref]5ces 9 su* regulations to =eign c\ntry & relevant =eign c\ntry z ref]5ces to ! ,unit$ ,/ates4 ,! ,secret>y may issue regulations decreas+ ! ?re%old p]c5t 9 any ( ! te/s "u su* regulations = det]m9+ if bus9ess activities con/itute significant dome/ic bus9ess activities = purposes ( ?is p>agraph4 4 7b7 ,con=m+ am5dm5ts 7#a7 ,clause 7i7 ( section #ghgd7;a77#b77;,b7 is am5d$ by /rik+ aft] ,m>* #d1 #bjjc1 & ins]t+ aft] ,m>* #d1 #bjjc1 & be=e ,decemb] #bc1 #bjag14 7#b7 ,subsection 7c7 ( section #ghgd is am5d$-- 7,a7 9 p>agraph 7#b7-- 7i7 by /rik+ subsection 7a77#b77;,b77ii7 & ins]t+ subsections 7a77#b77;,b77ii7 & 7b77#b77;,b77i72 & 7ii7 by ins]t+ or 7b77#b77;,a7 aft] 7a77#b77;,b77i7 9 subp>agraph 7,b72 7,b7 9 p>agraph 7#c71 by ins]t+ or 7b77#b77;,b77i71 z ! case may be1 aft] 7a77#b77;,b77ii72 7,c7 9 p>agraph 7#e71 by /rik+ subsection 7a77#b77;,b77ii7 & ins]t+ subsections 7a77#b77;,b77ii7 & 7b77#b77;,b77i72 & 7,d7 9 p>agraph 7#f71 by ins]t+ or inv]t$ dome/ic corporation1 z ! case may be1 aft] surrogate =eign corporation4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s end+ aft] ,decemb] #bb1 #bjag4 #e4 ,treatm5t ( =eign corporations manag$ & controll$ 9 ! ,unit$ ,/ates z dome/ic corporations 7a7 ,9 g5]al ,section #ggja is am5d$ by r$esignat+ subsection 7p7 z subsection 7q7 & by ins]t+ aft] subsection 7o7 ! foll[+ new subsection3 7p7 ,c]ta9 corporations manag$ & controll$ 9 ! ,unit$ ,/ates treat$ z dome/ic = income tax 7#a7 ,9 g5]al ,not)/&+ subsection 7a77#d71 9 ! case ( a corporation describ$ 9 p>agraph 7#b7 if-- 7,a7 ! corporation w\ld n o!rwise be treat$ z a dome/ic corporation = purposes ( ?is title1 b 7,b7 ! managem5t & control ( ! corporation occurs1 directly or indirectly1 prim>ily )9 ! ,unit$ ,/ates1 !n1 solely = purposes ( *apt] #a 7& any o!r provision ( ?is title relat+ to *apt] #a71 ! corporation %all be treat$ z a dome/ic corporation4 7#b7 ,corporation describ$ 7,a7 ,9 g5]al ,a corporation is describ$ 9 ?is p>agraph if-- 7i7 ! /ock ( su* corporation is regul>ly trad$ on an e/abli%$ securities m>ket1 or 7ii7 ! aggregate gross assets ( su* corporation 7or any pr$ecessor !re(71 includ+ assets "u managem5t = inve/ors1 :e!r held directly or indirectly1 at any "t dur+ ! taxable ye> or any prec$+ taxable ye> is #ej1jjj1jjj or m4 7,b7 ,g5]al exception ,a corporation %all n be treat$ z describ$ 9 ?is p>agraph if-- 7i7 su* corporation 0 treat$ z a corporation describ$ 9 ?is p>agraph 9 a prec$+ taxable ye>1 7ii7 su* corporation-- 7,i7 is n regul>ly trad$ on an e/abli%$ securities m>ket1 & 7,,ii7 has1 & is reasonably expect$ to cont9ue to h1 aggregate gross assets 7includ+ assets "u managem5t = inve/ors1 :e!r held directly or indirectly7 ( less ?an #ej1jjj1jjj1 & 7iii7 ! ,secret>y grants a waiv] to su* corporation "u ?is subp>agraph4 7#c7 ,managem5t & control 7,a7 ,9 g5]al ,! ,secret>y %all prescribe regulations = purposes ( det]m9+ cases 9 :i* ! managem5t & control ( a corporation is to be treat$ z occurr+ prim>ily )9 ! ,unit$ ,/ates4 7,b7 ,executive (fic]s & s5ior managem5t ,su* regulations %all provide t-- 7i7 ! managem5t & control ( a corporation %all be treat$ z occurr+ prim>ily )9 ! ,unit$ ,/ates if sub/antially all ( ! executive (fic]s & s5ior managem5t ( ! corporation :o ex]cise day-to-day responsibility = mak+ decisions involv+ /rategic1 f9ancial1 & op]ational policies ( ! corporation are locat$ prim>ily )9 ! ,unit$ ,/ates1 & 7ii7 individuals :o are n executive (fic]s & s5ior managem5t ( ! corporation 7includ+ individuals :o are (fic]s or employees ( o!r corporations 9 ! same *a9 ( corporations z ! corporation7 %all be treat$ z executive (fic]s & s5ior managem5t if su* individuals ex]cise ! day-to-day responsibilities ( ! corporation describ$ 9 clause 7i74 7,c7 ,corporations prim>ily hold+ inve/m5t assets ,su* regulations %all also provide t ! managem5t & control ( a corporation %all be treat$ z occurr+ prim>ily )9 ! ,unit$ ,/ates if-- 7i7 ! assets ( su* corporation 7directly or indirectly7 consi/ prim>ily ( assets be+ manag$ on behalf ( inve/ors1 & 7ii7 decisions ab\t h[ to inve/ ! assets are made 9 ! ,unit$ ,/ates4 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ on or aft] ! date :i* is #b ye>s aft] ! date ( ! enactm5t ( ?is ,act1 :e!r or n regulations are issu$ "u section #ggja7p77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf1 z add$ by ?is section4