Page:United States Statutes at Large Volume 85.djvu/558

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[85 STAT. 528]
[85 STAT. 528]
PUBLIC LAW 92-000—MMMM. DD, 1971

528 80 Stat. 1557.

26 USC 1442. Anfe, p. 527.

68A Stat. 275;

PUBLIC LAW 92-178-DEC. 10, 1971 (e)

WITHHOLDING ON FOREIGN CORPORATIONS.

[85 Sectioil

STAT.

1442(a)

(relating to withholding of tax on foreign corporations) is amended— (1) by striking out "and" the last time it appears, and (2) by inserting before the period at the end thereof ", and the reference in section 1441(c)(8) to section 8 7 1 (a)(1)(C) shall be treated as referring to section 881(a)(3)". (f) EFFECTIVE DATES.—The amendments to sections 871 and 881 of the Internal Revenue Code of 1954 made by this section shall apply with respect to taxable years beginning after December 31, 1966. The amendments to sections 1441 and 1442 of such Code made by this section shall apply with respect to payments occurring on or after April 1, 1972. SEC. 314. INCOME FROM CERTAIN AIRCRAFT AND VESSELS. (a) ELECTION.—Section 861 (relating to iucomc from sources witMu the United States) is amended by adding at the end thereof the following new subsection: " (e) ELECTION TO TREAT INCOME F R O M CERTAIN AIRCRAFT AND VESSELS AS I N C O M E F R O M SOURCES W I T H I N THE UNITED STATES. —

Ante, p. 501. 78 Stat. 120.

"(1) IN GENERAL.—For purposes of subsection (a) and section 862(a), if a taxpayer owning an aircraft or vessel which is section 38 property (or would be section 38 property but for section 48(a) (^5)) leases such aircraft or vessel to a United States person, other than a member of the same controlled group of corporations (as defined in section 1563) as the taxpayer, and if such aircraft or vessel is manufactured or constructed in the United States, the taxpayer may elect, for any taxable year ending after the commencement of such lease, to treat all amounts includible in gross income with respect to such aircraft or vessel (whether during or after the period of any such lease), including gain from sale or other disposition of such aircraft or vessel, as income from sources within the United States. "(2) EFFECT OF ELECTION.—An election under paragraph (1) made with respect to any aircraft or vessel shall apply to the taxable year for which made and to all subsequent taxable years. Such election may not be revoked except with the consent of the Secretary or his delegate. "(3)

MANNER AND TIME OF ELECTION AND REVOCATION.—An

election under paragraph (1), and any revocation of such election, shall be made in such manner and at such time as the Secretary or his delegate prescribes by regulations. "(4)

68A Stat. 276.

CERTAIN TR.VNSFER8 INVOLVING CARRYOVER BASIS.—If

the

taxpayer transfers or distributes an aircraft or vessel which is subject to an election under paragraph (1) and the basis of such, aircraft, or vessel in the hands of the transferee or distributee is determined by reference to its basis in the hands of the transferor or distributor, the transferee or distributee shall, for purposes of paragraph (1), be treated as having made an election with respect to such aircraft or vessel." ^j^^ CLERICAL AMENDMENT.—Section 862 (relating to income from sources without the United States) is amended by adding at the end thereof the following new subsection: "(c)

CROSS REFERENCE—

"For source of amounts attributable to certain aircraft and vessels, see section 861(e)." (c) EFFECTIVE DATE,—The amendments made by this section shall apply to taxable years ending after August 15, 1971, but only with respect to leases entered into after such date.