PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2411 (Q Subsection (b) of section 872 is amended by adding at the end the following new paragraph: "(T) TREATMENT OP POSSESSIONS.— To the extent provided in regulations, a possession of the United States shall be treated as a foreign country for purposes of this subsection." (D) Paragraph (4) of section 883(a) is amended by striking "(5) and (6)" and inserting "(5), (6), and (7)". (9) Paragraph (4) of section 887(b) (as redesignated by para- graph (8) is amended by striking "transportation income' the first two places it appears and inserting "United States source gross transportation income". (10) Subsection (a) of section 883 is amended by adding at the end the following new paragraph: "(5) SPECIAL RULE FOR COUNTRIES WHICH TAX ON RESIDENCE BASIS.—For purposes of this subsection, there shall not be taken into account any failure of a foreign country to grant an exemp- tion to a corporation organized in the United States if such corporation is subject to tax by such foreign country on a residence basis pursuant to provisions of foreign law which meets such standards (if any) as the Secretary may prescribe." K (11) Paragraph (2) of section 4371 is amended by striking ", unless the insurer is subject to tax under section 842(b)". (12) Subsection (g) of section 995 is amended by striking "section 511" and inserting "section 511 (or any other person otherwise subject to tax under section 511)". (13) Effective with respect to taxable years ending after the Effective date. date of the enactment of this Act (or, at the election of the taxpayer, beginning after December 31, 1986), subsection (e) of section 402 is amended by adding at the end the following new paragraph: "(7) COORDINATION WITH FOREIGN TAX CREDIT LIMITATIONS. — Subsections (a), (b), and (c) of section 904 shall be applied separately with respect to any lump simi distribution on which tax is imposed under paragraph (1), and the amount of such distribution shall be treated as the taxable income for purposes of such seoarate aoolication " ^ (14) Paragraph (2)(A) of section 10120) of the 1988 Act is 26 USC 245. amended by striking "section 245" and inserting "section 245(a)". (j) AMENDMENTS RELATED TO SECTION 1014 OF THE 1988 ACT. — (1) The subparagraph (Q of section l(i)(3) added by section 1014(e)(7) of the 1988 Act is redesignated as subparagraph (D). (2) Paragraph (1) of section 2654(a) is amended by adding at the end the following new sentence: "The preceding shall be applied after any basis adjustment under section 1015 with respect to the transfer." (3) Subsection (g) of section 642 is amended by inserting after the first sentence the following new sentence: Rules similar to the rules of the preceding sentence shall apply to amounts which may be taken into account under 2621(a)(2) or 2622(b)." ^ (4) Paragraphs (1) and (3) of section 2642(b) are each amended by striking "a timely filed gift tax return required by section 6019" and inserting "a gift tax return filed on or before the date prescribed by section 6075(b)". (5) Paragraph (1) of section 6654G) is amended by striking "this subsection shall" and inserting "this section shall".
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