118 STAT. 1568 PUBLIC LAW 108–357—OCT. 22, 2004 1504(a) shall be applied by substituting ‘more than 50 percent’ for ‘at least 80 percent’ each place it appears. ‘‘(f) SPECIAL RULES.—For purposes of this section— ‘‘(1) CANCELLATION OF RESTRICTION.—The cancellation of a restriction which by its terms will never lapse shall be treated as a grant. ‘‘(2) PAYMENT OR REIMBURSEMENT OF TAX BY CORPORATION TREATED AS SPECIFIED STOCK COMPENSATION.—Any payment of the tax imposed by this section directly or indirectly by the expatriated corporation or by any member of the expanded affiliated group which includes such corporation— ‘‘(A) shall be treated as specified stock compensation, and ‘‘(B) shall not be allowed as a deduction under any provision of chapter 1. ‘‘(3) CERTAIN RESTRICTIONS IGNORED.—Whether there is specified stock compensation, and the value thereof, shall be determined without regard to any restriction other than a restriction which by its terms will never lapse. ‘‘(4) PROPERTY TRANSFERS.—Any transfer of property shall be treated as a payment and any right to a transfer of property shall be treated as a right to a payment. ‘‘(5) OTHER ADMINISTRATIVE PROVISIONS.—For purposes of subtitle F, any tax imposed by this section shall be treated as a tax imposed by subtitle A. ‘‘(g) REGULATIONS.—The Secretary shall prescribe such regula tions as may be necessary or appropriate to carry out the purposes of this section.’’. (b) DENIAL OF DEDUCTION.— (1) IN GENERAL.—Paragraph (6) of section 275(a) is amended by inserting ‘‘45,’’ before ‘‘46,’’. (2) $1,000,000 limit on deductible compensation reduced by payment of excise tax on specified stock compensation.— Paragraph (4) of section 162(m) is amended by adding at the end the following new subparagraph: ‘‘(G) COORDINATION WITH EXCISE TAX ON SPECIFIED STOCK COMPENSATION.—The dollar limitation contained in paragraph (1) with respect to any covered employee shall be reduced (but not below zero) by the amount of any payment (with respect to such employee) of the tax imposed by section 4985 directly or indirectly by the expatriated corporation (as defined in such section) or by any member of the expanded affiliated group (as defined in such section) which includes such corporation.’’. (c) CONFORMING AMENDMENTS.— (1) The last sentence of section 3121(v)(2)(A) is amended by inserting before the period ‘‘or to any specified stock com pensation (as defined in section 4985) on which tax is imposed by section 4985’’. (2) The table of chapters for subtitle D is amended by inserting after the item relating to chapter 44 the following new item: ‘‘Chapter 45. Provisions relating to expatriated entities.’’. (d) EFFECTIVE DATE.—The amendments made by this section shall take effect on March 4, 2003; except that periods before such date shall not be taken into account in applying the periods 26 USC 4985 note.
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