PUBLIC LAW 99-514—OCT. 22, 1986
100 STAT. 2539
individuals who a r e not residents of such foreign country or a n other foreign country meeting the requirements of such paragraph s (1) and (2). "(2) T R E A T M E N T
O F CONTROLLED
FOREIGN
CORPORATIONS.—
Paragraph (1) shall not apply to any foreign corporation which is a controlled foreign corporation (as defined in section 957(a)). "(3) EXCEPTION FOR PUBLICLY TRADED CORPORATIONS.—Para-
g r a p h (1) shall not apply to any foreign corporation— "(A) the stock of which is primarily and regularly traded on a n established securities m a r k e t in the foreign country in which such corporation is organized, or "(B) which is wholly owned (either directly or indirectly) by a n other corporation m e e t i n g the requirements of subparagraph (A) and is organized in the s a m e foreign country a s such other corporation. "(4) STOCK OWNERSHIP THROUGH ENTITIES.—For purposes of
paragraph (1), stock owned (directly or indirectly) by or for a corporation, partnership, t r u s t, or e s t a t e shall be t r e a t e d as being owned proportionately by its shareholders, part n e r s, or beneficiaries. Stock considered to be owned by a person by reason of the application of the preceding sentence shall, for purposes of applying such sentence, be treated a s actually owned by such person." (d) R E P E A L O F SPECIAL T R E A T M E N T FOR LEASED AIRCRAFT, E T C. —
Section 861 is amended by striking o u t subsection (e) and by redesignating subsection (f) a s subsection (e). (e) CONFORMING AMENDMENT.—Section 863(b)(1) is amended by striking out " transportation or other services" and inserting in lieu thereof "services". (0 EFFECTIVE D A T E S. —
(1) IN GENERAL.—Except as provided in paragraph (2), the amendments m a d e by this section shall apply to taxable year s beginning after December 31, 1986. (2) SPECIAL RULE FOR CERTAIN LEASED PROPERTY.—The amend -
m e n t s m a d e by subsections (a) and (d) shall not apply to any income a t t r i b u t a b l e to property held by the tax p a y e r on January 1, 1986, if such property w a s first leased by the tax p a y e r before January 1, 1986, in a lease to which section 863(c)(2)(B) or 861(e) of the I n t e r n a l Revenue Code of 1954 (as in effect on the day before the date of the e n a c t m e n t of this Act) applied. (3) SPECIAL RULE FOR CERTAIN SHIPS LEASED BY THE UNITED STATES NAVY.—
(A) IN GENERAL.—In the case of any property described in subparagraph (B), paragraph (2) shall be applied by substituting "1987" for "1986" each place it appears. (B) PROPERTY TO WHICH PARAGRAPH APPLIES.—Property
described in this subparagraph consists of 4 ships which a r e to be leased by the United States Navy and which a r e the subject of I n t e r n a l Revenue Service rulings bearing the following dates and which involved the following a m o u n t of financing, respectively: •'
March. 1986 % February 5, 1986 April 22, 1986 May 22, 1986
$176,844,000 64,567,000 64,598,000 175,300,000.
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