118 STAT. 1491 PUBLIC LAW 108–357—OCT. 22, 2004 (but for an election under this paragraph) be a member for purposes of applying paragraph (1). ‘‘(ii) ELECTING FINANCIAL INSTITUTION GROUP.— The term ‘electing financial institution group’ means the group of corporations to which this subsection applies separately by reason of the application of para graph (4)(A) and which includes financial corporations by reason of an election under subparagraph (A). ‘‘(F) REGULATIONS.—The Secretary shall prescribe such regulations as may be appropriate to carry out this sub section, including regulations— ‘‘(i) providing for the direct allocation of interest expense in other circumstances where such allocation would be appropriate to carry out the purposes of this subsection, ‘‘(ii) preventing assets or interest expense from being taken into account more than once, and ‘‘(iii) dealing with changes in members of any group (through acquisitions or otherwise) treated under this paragraph as an affiliated group for purposes of this subsection. ‘‘(6) ELECTION.—An election to have this subsection apply with respect to any worldwide affiliated group may be made only by the common parent of the domestic affiliated group referred to in paragraph (1)(C) and may be made only for the first taxable year beginning after December 31, 2008, in which a worldwide affiliated group exists which includes such affiliated group and at least 1 foreign corporation. Such an election, once made, shall apply to such common parent and all other corporations which are members of such worldwide affiliated group for such taxable year and all subsequent years unless revoked with the consent of the Secretary.’’. (b) EXPANSION OF REGULATORY AUTHORITY.—Paragraph (7) of section 864(e) is amended— (1) by inserting before the comma at the end of subpara graph (B) ‘‘and in other circumstances where such allocation would be appropriate to carry out the purposes of this sub section’’, and (2) by striking ‘‘and’’ at the end of subparagraph (E), by redesignating subparagraph (F) as subparagraph (G), and by inserting after subparagraph (E) the following new subpara graph: ‘‘(F) preventing assets or interest expense from being taken into account more than once, and’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2008. SEC. 402. RECHARACTERIZATION OF OVERALL DOMESTIC LOSS. (a) GENERAL RULE.—Section 904 is amended by redesignating subsections (g), (h), (i), (j), and (k) as subsections (h), (i), (j), (k), and (l) respectively, and by inserting after subsection (f) the fol lowing new subsection: ‘‘(g) RECHARACTERIZATION OF OVERALL DOMESTIC LOSS.— ‘‘(1) GENERAL RULE.—For purposes of this subpart and section 936, in the case of any taxpayer who sustains an overall domestic loss for any taxable year beginning after December 31, 2006, that portion of the taxpayer’s taxable income from 26 USC 864 note. Applicability.
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