PUBLIC LAW 99-514—OCT. 22, 1986
100 STAT. 2553
"(1) insurance income (as defined under section 953),". (B) Subsection (e) of section 954 is amended by striking out the last sentence. (C) Subsection (b) of section 957 is amended by striking out "income derived from insurance of United States risks" and inserting in lieu thereof "insurance income". (D) The section heading for section 953 is amended to read as follows: "SEC. 953. INSURANCE INCOME."
(E) The table of sections for subpart F of part III of subchapter N of chapter 1 is amended by striking out the item relating to section 953 and inserting in lieu thereof the following: "Sec. 953. Insurance income." (c) REPEAL OF EXCLUSION FOR REINVESTED SHIPPING INCOME.—
(1) IN GENERAL.—Paragraph (2) of section 9540?) (relating to exclusion for reinvested shipping income) is hereby repealed. (2) SPACE AND CERTAIN OCEAN ACTIVITIES INCLUDED.—Subsec-
tion if) of section 954 (defining foreign base company shipping income) is amended by adding at the end thereof the following new sentence: "Such term includes any income derived from a space or ocean activity (as defined in section 863(d)(2))." (3) CONFORMING AMENDMENTS.—
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(A)(i) Section 954 is amended by striking out subsection (g) and by redesignating subsection (h) as subsection (g). (ii) Paragraph (5) of section 954(a) is amended by striking out "determined under subsection (h)" and inserting in lieu thereof "determined under subsection (g)". (B) Subparagraph (A) of section 955(a)(1) is amended by striking out "all prior taxable years" and inserting in lieu thereof "all prior taxable years beginning before 1987". (C) Subparagraph (A) of section 955(a)(2) is amended by striking out "at the close of the preceding taxable year" and inserting in lieu thereof "as of the close of the last taxable year beginning before 1987".
(d) EXCEPTION WHERE FOREIGN CORPORATION NOT AVAILED OF TO
REDUCE TAX.—Paragraph (4) of section 954(b) (relating to exception for foreign corporations not availed of to reduce taxes) is amended to read as follows: "(4) EXCEPTION FOR CERTAIN INCOME SUBJECT TO HIGH FOREIGN
TAXES.—For purposes of subsection (a) and section 953, foreign base company income and insurance income shall not include in any item of income received by a controlled foreign corporation if the taxpayer establishes to the satisfaction of the Secretary -B" that such income was subject to an effective rate of income tax imposed by a foreign country greater than 90 percent of the maximum rate of tax specified in section 11. The preceding sentence shall not apply to foreign base company oil-related income described in subsection (a)(5)." (e) DEFINITION OF RELATED PERSON.—
(1) Paragraph (3) of section 954(d) (defining related person) is amended by striking out subparagraphs (A), (B), and (C), and inserting in lieu thereof the following:
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