80 STAT.]
PUBLIC LAW 8 9 - 8 0 9 - N O V. 13, 1966
" (2) TRANSFERS or INTANGIBLE PROPERTY.—Except as provided in paragraph (3), paragraph (1) shall not appl^ to the transfer of intangible property by a nonresident not a citizen of the United States. "(3) EXCEPTIONS.—Paragraph (2) shall not apply in the case of a donor who at any time after March 8, 1965, and within the 10-year period ending with the date of transfer lost United States citizenship unless— " (A) such donor's loss of United States citizenship resulted from the application of section 301(b), 350, or 355 of the Immigration and Nationality Act, as amended (8 U.S.C. 1401(b), 1482, or 1487), or " (B) such loss did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle A. " (4) BURDEN OF PROOF.—If the Secretary or his delegate estab-
lishes that it is reasonable to believe that an individual's loss of United States citizenship would, but for paragraph (3), result in a substantial reduction for the calendar year in the taxes on the transfer of property by gift, the burden of proving that such loss of citizenship did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle A shall be on such individual." (b) TRANSFERS IN GENERAL.—Subsection (b) of section 251,1 (relating to situs rule for stock in a corporation) is amended to read as follows: " (b) INTANGIBLE PROPERTY.—For purposes of this chapter, in the case of a nonresident not a citizen of the United States who is excepted from the application of section 2501(a)(2)— "(1) shares of stock issued by a domestic corporation, and " (2) debt obligations of— " (A) a United States person, or " (B) the United States, a State or any political subdivision thereof, or the District of Columbia, which are owned and held by such nonresident shall be deemed to be property situated within the United States." (c) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to the calender year 1967 and all calendar years thereafter.
1575
66 Stat. 236. 68A Stat. 4. 26 USC 1-2524.
Ante, p. 1574.
SEC. 110. TREATY OBLIGATIONS.
No amendment made by this title shall apply in any case where its application would be contrary to any treaty obligation of the United States. For purposes of the preceding sentence, the extension of a benefit provided by any amendment made by this title shall not be deemed to be contrary to a treaty obligation of the United States.
TITLE II—OTHER AMENDMENTS TO INTERNAL REVENUE CODE SEC. 201. APPLICATION OF INVESTMENT CREDIT TO PROPERTY USED IN POSSESSIONS OF THE UNITED STATES. (a) PROPERTY USED BY DOMESTICORPORATIONS, ETC.—Section
48(a)(2)(B) (relating to property used outside the United States) is amended— (1) by striking out "and" at the end of clause (v); (2) by striking out the period at the end of clause (vi) and inserting in lieu thereof "; and"; and (3) by adding at the end thereof the following new clause: "(vii) any property which is owned by a domestic corporation (other than a corporation entitled to the
76 Stat. 967.
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