PUBLIC LAW 94-12—MAR. 29, 1975 (A), (B), (C), or (D) of subsection (c)(2) is disposed of during any taxable year— " (i) the taxpayer notwithstanding any other provision of this chapter (other than paragraph (1)) shall be deemed to have received and recognized foreign oil related income in the taxable year of the disposition, by reason of such disposition, in an amount equal to the lesser of the excess of the fair market value of such property over the taxpayer's adjusted basis in such property or the remaining amount of the foreign oil related losses which were not used under paragraph (1) for such taxable year or any prior taxable year, and " ( i i) paragraph (1) shall be applied with respect to such income by substituting '100 percent' for '50 percent'. " (B) DISPOSITION DEFINED.—For purposes of this subsection, the term 'disposition' includes a sale, exchange, distribution, or gift of property, whether or not gain or loss is recognized on the transfer. " (C) EXCEPTIONS.—Notwithstanding subparagraph (B), the term 'disposition' does not include— " (i) a disposition of property which is not a material factor in the realization of income by the taxpayer, or " ( i i) a disposition of property to a domestic corporation in a distribution or transfer described in section 381(a).
89 STAT. 57
26 USC 381.
" (g) W E S T E R N H E M I S P H E R E TRADE CORPORATIONS W H I C H A R E M E M -
BERS OF AN AFFILIATED GROUP.—If a Western Hemisphere trade corporation is a member of an affiliated group for the taxable year, then in applying section 901, the amount of any income, war profits, and 26 USC 901. excess p r o n t s taxes paid or accrued (or deemed to have been paid) during the taxable year with respect to foreign oil and gas extraction income which would (but for this section and section 1503(b)) be 26 USC 1503. taken into account for purposes of section 901 shall be reduced by the greater of— " (1) the reduction with respect to such taxes provided by subsection (a) of this section, or " (2) the reduction determined under section 1503(b) by applying section 1503(b) separately with respect to such taxes, but not by both such reductions." (b) CERTAIN P A Y M E N T S N O T TO B E CONSIDERED AS TAXES.—Section
901 is amended by redesignating subsection (f) as subsection (g), and by a d d i n g after subsection (e) the following new subsection: "(f)
CERTAIN
P A Y M E N T S FOR O I L OR G A S N O T CONSIDERED AS
TAXES.—Notwithstanding subsection (b) and sections 902 and 960, the amount of any income, or profits, and excess profits taxes paid or accrued during the taxable year to any foreign country in connection with the purchase and sale of oil or gas extracted in such country is not to be considered as tax for purposes of section 275(a) and this section if— " (1) the tax p a y e r has no economic interest in the oil or gas to which section 611(a) applies, and " (2) either such purchase or sale is at a price which differs from the fair market value for such oil or gas at the time of such purchase or sale." (c) CLERICAL AMENDMENT. — The table of sections for subpart A of part III of subchapter N of chapter 1 is amended by adding at the end thereof the following new item: "Sec. 907. Special rules in case of foreign oil and gas income."
26 USC 902, ^^O. 26 USC 275. 26 USC 611.
�
