118 STAT. 1423 PUBLIC LAW 108–357—OCT. 22, 2004 TITLE I—PROVISIONS RELATING TO RE PEAL OF EXCLUSION FOR EXTRATERRITORIAL INCOME SEC. 101. REPEAL OF EXCLUSION FOR EXTRATERRITORIAL INCOME. (a) IN GENERAL.—Section 114 is hereby repealed. (b) CONFORMING AMENDMENTS.— (1) Subpart E of part III of subchapter N of chapter 1 (relating to qualifying foreign trade income) is hereby repealed. (2) The table of subparts for such part III is amended by striking the item relating to subpart E. (3) The table of sections for part III of subchapter B of chapter 1 is amended by striking the item relating to section 114. (4) The second sentence of section 56(g)(4)(B)(i) is amended by striking ‘‘114 or’’. (5) Section 275(a) is amended— (A) by inserting ‘‘or’’ at the end of paragraph (4)(A), by striking ‘‘or’’ at the end of paragraph (4)(B) and inserting a period, and by striking subparagraph (C), and (B) by striking the last sentence. (6) Paragraph (3) of section 864(e) is amended— (A) by striking: ‘‘(3) TAX EXEMPT ASSETS NOT TAKEN INTO ACCOUNT.— ‘‘(A) IN GENERAL.—For purposes of’’; and inserting: ‘‘(3) TAX EXEMPT ASSETS NOT TAKEN INTO ACCOUNT.—For purposes of’’, and (B) by striking subparagraph (B). (7) Section 903 is amended by striking ‘‘114, 164(a),’’ and inserting ‘‘164(a)’’. (8) Section 999(c)(1) is amended by striking ‘‘941(a)(5),’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to transactions after December 31, 2004. (d) TRANSITIONAL RULE FOR 2005 AND 2006.— (1) IN GENERAL.—In the case of transactions during 2005 or 2006, the amount includible in gross income by reason of the amendments made by this section shall not exceed the applicable percentage of the amount which would have been so included but for this subsection. (2) APPLICABLE PERCENTAGE.—For purposes of paragraph (1), the applicable percentage shall be as follows: (A) For 2005, the applicable percentage shall be 20 percent. (B) For 2006, the applicable percentage shall be 40 percent. (e) REVOCATION OF ELECTION TO BE TREATED AS DOMESTIC CORPORATION.—If, during the 1 year period beginning on the date of the enactment of this Act, a corporation for which an election is in effect under section 943(e) of the Internal Revenue Code of 1986 revokes such election, no gain or loss shall be recognized with respect to property treated as transferred under clause (ii) of section 943(e)(4)(B) of such Code to the extent such property— (1) was treated as transferred under clause (i) thereof, or 26 USC 114 note. 26 USC 56 note. 26 USC 941–943.
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