118 STAT. 1564 PUBLIC LAW 108–357—OCT. 22, 2004 ‘‘(3) PLAN DEEMED IN CERTAIN CASES.—If a foreign corpora tion acquires directly or indirectly substantially all of the prop erties of a domestic corporation or partnership during the 4 year period beginning on the date which is 2 years before the ownership requirements of subsection (a)(2)(B)(ii) are met, such actions shall be treated as pursuant to a plan. ‘‘(4) CERTAIN TRANSFERS DISREGARDED.—The transfer of properties or liabilities (including by contribution or distribu tion) shall be disregarded if such transfers are part of a plan a principal purpose of which is to avoid the purposes of this section. ‘‘(5) SPECIAL RULE FOR RELATED PARTNERSHIPS.—For pur poses of applying subsection (a)(2)(B)(ii) to the acquisition of a trade or business of a domestic partnership, except as pro vided in regulations, all partnerships which are under common control (within the meaning of section 482) shall be treated as 1 partnership. ‘‘(6) REGULATIONS.—The Secretary shall prescribe such regulations as may be appropriate to determine whether a corporation is a surrogate foreign corporation, including regulations— ‘‘(A) to treat warrants, options, contracts to acquire stock, convertible debt interests, and other similar interests as stock, and ‘‘(B) to treat stock as not stock. ‘‘(d) OTHER DEFINITIONS.—For purposes of this section— ‘‘(1) APPLICABLE PERIOD.—The term ‘applicable period’ means the period— ‘‘(A) beginning on the first date properties are acquired as part of the acquisition described in subsection (a)(2)(B)(i), and ‘‘(B) ending on the date which is 10 years after the last date properties are acquired as part of such acquisition. ‘‘(2) INVERSION GAIN.—The term ‘inversion gain’ means the income or gain recognized by reason of the transfer during the applicable period of stock or other properties by an expatri ated entity, and any income received or accrued during the applicable period by reason of a license of any property by an expatriated entity— ‘‘(A) as part of the acquisition described in subsection (a)(2)(B)(i), or ‘‘(B) after such acquisition if the transfer or license is to a foreign related person. Subparagraph (B) shall not apply to property described in sec tion 1221(a)(1) in the hands of the expatriated entity. ‘‘(3) FOREIGN RELATED PERSON.—The term ‘foreign related person’ means, with respect to any expatriated entity, a foreign person which— ‘‘(A) is related (within the meaning of section 267(b) or 707(b)(1)) to such entity, or ‘‘(B) is under the same common control (within the meaning of section 482) as such entity. ‘‘(e) SPECIAL RULES.— ‘‘(1) CREDITS NOT ALLOWED AGAINST TAX ON INVERSION GAIN.—Credits (other than the credit allowed by section 901) shall be allowed against the tax imposed by this chapter on
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