Page:United States Statutes at Large Volume 90 Part 2.djvu/151

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PUBLIC LAW 94-000—MMMM. DD, 1976

PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1619

paragraph (E), by redesignating subparagraph (F) as subparagraph (H), and by inserting after subparagraph (E) the following new subparagraphs: " (F) the stock or obligations of a domestic corporation which is neither a United States shareholder (as defined in section 9 5 1 (b)) of the controlled foreign corporation, n o r a domestic corporation, 25 percent or more of the total combined voting power of which, immediately after the acquisition of any stock in such domestic corporation by the controlled foreign corporation, is owned, or is considered as being owned, by such United States shareholders in the a g g r e g a t e; " (G) any movable property (other than a vessel or aircraft) which is used for the purpose of exploring for, developing, removing, or t r a n s p o r t i n g resources from ocean waters or under such waters Avhen used on the Continental Shelf of the United States; and". (b)

CONSTRUCTIVE O W N E R S H I P OF STOCK.—Section 958(b) ( r e l a t i n g

26 USC 958.

to rules for determining stock ownership) is amended— (1) by striking out "954(d)(3), " the first place it appears and inserting in lieu thereof "954(d)(3), 956(b)(2), "; (2) by striking out " 9 5 4 (d)(3), " the second place i t appears and inserting in lieu thereof "954(d)(3), to treat the stock of a domestic corporation as owned by a United States shareholder of the conti-olled foreign corporation for purposes of section 956(b) (2), "; and (3) by a d d i n g at the end thereof the following new sentence: " Paragraph s (1) and (4) shall not apply for purposes of section 956(b)(2) to treat stock of a domestic corporation as not owned by a United States shareholder." (c) EFFECTIVE DATE.—The amendments made by this section shall 26 USC 956 apply to taxable years of foreign corporations beginning after Decern- "^'t^ber 31, 1975, and to taxable years of United States shareholders (within the meaning of section 951(b) of the I n t e r n a l Revenue Code of 1954) within which or with which such taxable years of such foreign corporations end. I n determining for purposes of any taxable year referred to in the preceding sentence the amount referred to in section 956(a)(2)(A) of the I n t e r n a l Revenue Code of 1954 for the last taxable year of a corporation beginning before January 1, 1976, the amendments made by this section shall be deemed also to apply to such .., ' last taxable year. SEC. 1022. REPEAL OF EXCLUSION FOR EARNINGS OF LESS DEVELOPED COUNTRY CORPORATIONS FOR PURPOSES OF SECTION 1248. (a) AMENDMENT OF SECTION 1 2 4 8 (d). — Paragraph (3) of section

26 USC 1248.

1248(d) (relathig to exclusion from earnings and profits of gain from certain sales or exchanges of stock in certain foreign corporations) is amended to read as follows: "(3)

LESS

DEVELOPED

COUNTRY

CORPORATIONS

UNDER

PRIOR

EAw.—Earnings and profits of a foreign corporation which were accumulated during any taxable year beginning before January 1, 1976, while such corporation was a less developed country corporation under section 902(d) as in effect before the enactment of the T a x Reduction Act of 1975.". (b) EFFECTIVE D A T E. — The amendment made by subsection (a) shall a p p l y to taxable years beginning after December 31, 1975.

^"-t^' P- 1626. 26 USC 1 note. 26 USC 1248 note.