118 STAT. 1518 PUBLIC LAW 108–357—OCT. 22, 2004 ‘‘(B) APPLICATION OF $500,000,000 LIMIT.—All corpora tions which are treated as a single employer under section 52(a) shall be limited to one $500,000,000 amount in sub section (b)(1)(A), and such amount shall be divided among such corporations under regulations prescribed by the Sec retary. ‘‘(C) PERMANENTLY REINVESTED EARNINGS.—If a finan cial statement is an applicable financial statement for more than 1 United States shareholder, the amount applicable under subparagraph (B) or (C) of subsection (b)(1) shall be divided among such shareholders under regulations pre scribed by the Secretary. ‘‘(d) DENIAL OF FOREIGN TAX CREDIT; DENIAL OF CERTAIN EXPENSES.— ‘‘(1) FOREIGN TAX CREDIT.—No credit shall be allowed under section 901 for any taxes paid or accrued (or treated as paid or accrued) with respect to the deductible portion of— ‘‘(A) any dividend, or ‘‘(B) any amount described in subsection (a)(2) which is included in income under section 951(a)(1)(A). No deduction shall be allowed under this chapter for any tax for which credit is not allowable by reason of the preceding sentence. ‘‘(2) EXPENSES.—No deduction shall be allowed for expenses properly allocated and apportioned to the deductible portion described in paragraph (1). ‘‘(3) DEDUCTIBLE PORTION.—For purposes of paragraph (1), unless the taxpayer otherwise specifies, the deductible portion of any dividend or other amount is the amount which bears the same ratio to the amount of such dividend or other amount as the amount allowed as a deduction under subsection (a) for the taxable year bears to the amount described in subsection (b)(2)(A) for such year. ‘‘(e) INCREASE IN TAX ON INCLUDED AMOUNTS NOT REDUCED BY CREDITS, ETC.— ‘‘(1) IN GENERAL.—Any tax under this chapter by reason of nondeductible CFC dividends shall not be treated as tax imposed by this chapter for purposes of determining— ‘‘(A) the amount of any credit allowable under this chapter, or ‘‘(B) the amount of the tax imposed by section 55. Subparagraph (A) shall not apply to the credit under section 53 or to the credit under section 27(a) with respect to taxes attributable to such dividends. ‘‘(2) LIMITATION ON REDUCTION IN TAXABLE INCOME, ETC.— ‘‘(A) IN GENERAL.—The taxable income of any United States shareholder for any taxable year shall in no event be less than the amount of nondeductible CFC dividends received during such year. ‘‘(B) COORDINATION WITH SECTION 172.—The nondeduct ible CFC dividends for any taxable year shall not be taken into account— ‘‘(i) in determining under section 172 the amount of any net operating loss for such taxable year, and ‘‘(ii) in determining taxable income for such taxable year for purposes of the 2nd sentence of section 172(b)(2).
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