PUBLIC LAW 104-191—AUG. 21, 1996 110 STAT. 2097 property referred to in subparagraph (A) is held by such corporation, a pro rata share of such property (determined on the basis of the value of such stock) shall be treated as sold by the corporation immediately before such disposition. "(D) ANTI-ABUSE RULES.— The Secretary shall prescribe such regulations as may be necessary to prevent the avoidance of the purposes of this paragraph, including where— "(i) the property is sold to the corporation, and "(ii) the property taken into account under subparagraph (A) is sold by the corporation. "(E) INFORMATION REPORTING.— The Secretary shall require such information reporting as is necessary to carry out the purposes of this paragraph.". (d) CREDIT FOR FOREIGN TAXES IMPOSED ON UNITED STATES SOURCE INCOME.— (1) Subsection (b) of section 877 is amended by adding at the end the following new sentence: "The tax imposed solely by reason of this section shall be reduced (but not below zero) by the amount of any income, war profits, and excess profits taxes (within the meaning of section 903) paid to any foreign country or possession of the United States on any income of the taxpayer on which tax is imposed solely by reason of this section." (2) Subsection (a) of section 877, as amended by subsection (a), is amended by inserting "(after any reduction in such tax under the last sentence of such subsection)" after "such subsection". (e) COMPARABLE ESTATE AND GIFT TAX TREATMENT.— (1) ESTATE TAX. — (A) IN GENERAL.—Subsection (a) of section 2107 is amended to read as follows: "(a) TREATMENT OF EXPATRIATES. — "(1) RATE OF TAX.— ^A tax computed in accordance with the table contained in section 2001 is hereby imposed on the transfer of the taxable estate, determined as provided in section 2106, of every decedent nonresident not a citizen of the United States if, within the 10-year period ending with the date of death, such decedent lost United States citizenship, unless such loss did not have for one of its principal purposes the avoidance of taxes under this subtitle or subtitle A. "(2) CERTAIN INDIVIDUALS TREATED AS HAVING TAX AVOIDANCE PURPOSE.— "(A) IN GENERAL.— For purposes of paragraph (1), an individual shall be treated as having a principal purpose to avoid such taxes if such individual is so treated under section 877(a)(2). "(B) EXCEPTION. —Subparagraph (A) shall not apply to a decedent meeting the requirements of section 877(c)(1).". (B) CREDIT FOR FOREIGN DEATH TAXES. —Subsection (c) of section 2107 is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph: " (2) CREDIT FOR FOREIGN DEATH TAXES.— "(A) IN GENERAL.—The tax imposed by subsection (a) shall be credited with the amount of any estate, inherit-
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