Page:United States Statutes at Large Volume 98 Part 1.djvu/720

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PUBLIC LAW 98-000—MMMM. DD, 1984

98 STAT. 672

PUBLIC LAW 98-369—JULY 18, 1984

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at an arm's length rate or a rate not more than 1 percentage point greater than the associated borrowing cost of the trust, and (iii) with respect to which any real property held by the trust is not used in the trade or business of any other member of the group of stapled entities.

SEC. 137. SERVICES RELATING TO INSURANCE POLICIES ARE TREATED AS PERFORMED IN COUNTRY OF RISK. 26 USC 954. (a) IN GENERAL.—Subsection (e) of section 954 (defining foreign base company services income) is amended by adding at the end thereof the following new sentence: "For purposes of paragraph (2), any services performed with respect to any policy of insurance or reinsurance with respect to which the primary insured is a related Ante, p. 644. person (within the meaning of section 864(d)(4)) shall be treated as having been performed in the country within which the insured hazards, risks, losses, or liabilities occur, and except as provided in regulations prescribed by the Secretary, rules similar to the rules of Post, p. 755. section 953(b) shall be applied in determining the income from such services." 26 USC 954 note. (b) EFFECTIVE DATE.—The amendments made by subsection (a) shall apply to taxable years of controlled foreign corporations beginning after the date of the enactment of this Act.

PART V—TREATMENT OF ALIEN INDIVIDUALS Ante, p. 518. 26 USC 7701.

SEC. 138. DEFINITION OF RESIDENT ALIEN AND NONRESIDENT ALIEN. (a) GENERAL RuLE.—Section 7701 (relating to definitions) is amended by redesignating subsections (b), (c), and (d) as subsections (c), (d), and (e), respectively, and by inserting after subsection (a) the following new subsection: "(b)

DEFINITION OF RESIDENT ALIEN AND NONRESIDENT ALIEN.—

"(1) IN GENERAL.—For purposes of this title (other title B)— "(A) RESIDENT ALIEN.—An alien individual treated as a resident of the United States with any calendar year if (and only if) such individual requirements of clause (i) or (ii): JJ3J,

"(i)

LAWFULLY

ADMITTED

FOR

than subshall be respect to meets the

PERMANENT

RESI-

DENCE.—Such individual is a lawful permanent resident of the United States at any time during such calendar year. "(ii) SUBSTANTIAL PRESENCE TEST.—Such individual meets the substantial presence test of paragraph (3). "(B) NONRESIDENT ALIEN.—An individual is a nonresident alien if such individual is neither a citizen of the United States nor a resident of the United States (within the meaning of subparagraph (A)). "(2) SPECIAL RULES FOR FIRST AND LAST YEAR OF RESIDENCY.— "(A) F I R S T YEAR O F RESIDENCY.—

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"(i) IN GENERAL.—If an alien individual is a resident of the United States under paragraph (1)(A) with respect to any calendar year, but was not a resident of the United States at any time during the preceding calendar year, such alien individual shall be treated as a resident of the United States only for the portion of