107 STAT. 498 PUBLIC LAW 103-66—AUG. 10, 1993 (1) of this subsection and the rules of subsection (f) shall apply for purposes of paragraphs (2) and (3) of this subsection.". 26 USC 959. (B) Section 959 is amended by adding at the end thereof the following new subsection: "(f) ALLOCATION RULES FOR CERTAIN INCLUSIONS.—
- (1) IN GENERAL.—For purposes of this section—
"(A) amounts that would be included under subparagraph (B) of section 951(a)(l) (determined without regard to this section) shall be treated as attributable first to earnings described in subsection (c)(2), and then to earnings descril^d in subsection (c)(3), and (B) amounts that would be included under subparagraph (C) of section 951(a)(l) (determined without regard to this section) shall be treated as attributeble first to earnings described in subsection (c)(2) to the extent the earnings so described were accumulated in taxable years beginning after September 30, 1993, and then to earnings described in subsection (c)(3). "(2) TREATMENT OP DISTRIBUTIONS.—In applying this section, actucd distributions shall be taken into account before amounts tiiat would be included under subparagraphs (B) and (C) of section 951(a)(l) (determined without regard to this section).** (C) Paragraph (1) of section 959(c) is amended to read as follows: "(1)firsttothe aggregate of— "(A) e£umings and profits attributeble to amounts included in gross income under section 951(a)(l)(B) (or which would have been included except for subsection (a)(2) of this section), and "(B) earnings and profite attributeble to amounte included in gross income under section 951(a)(l)(C) (or which would have been included except for subsection (a)(3) of this section), with any distribution being allocated between earnings and profite described in subparagraph (A) and earnings and profite described in subparagraph (B) proportionately on the basis of the respective amounte of such earnings and profite,**. (3) CfooRDiNATlON WITH PFic INCLUSIONS. — Subsection (c) of section 1293 is amended by adding at the end thereof the following new sentence: "If the passive foreign investment company is a controlled foreign corporation (as defined in section 957(a)), the preceding sentence shall not apply to any United States sharenolder (as defined in section 951(b)) in such corporation, and, in applying section 959 to any such shareholder, any inclusion under this section shall be treated as an inclusion under section 951(a)(l)(A). '*. (4) CONFORMING AMENDMENTS. — (A) Subsections (a) and (b) of section 959 are each amended by striking "earnings and profite for a taxable year** and inserting "earnings and profite**. (B) Paragraph (2) of section 959(c) is amended to read as follows: "(2) then to earnings and profite attributeble to amounte included in gross income under section 951(a)(l)(A) (but reduced by amounte not included under subparagraph (B) or (C) of
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