PUBLIC LAW 94-12—MAR. 29, 1975
89 STAT. 6 3
company shipping operations of such corporation determined under this subsection for all prior taxable years. "(2)
DECREASE I N QUALIFIED INVESTMENTS.—For purposes of
paragraph (1), the amount of the decrease in qualified investments in foreign base company shipping operations of any controlled foreign corporation for any taxable year is the amount by which— " (A) the amount of qualified investments in foreign base company shipping operations of the controlled foreign corporation a t the close of the preceding taxable year, exceeds " (B) the amount of qualified investments in foreign base company shipping operations of the controlled foreign corporation a t the close of the taxable year, to the extent that the amount of such decrease does not exceed the sum of the earnings and profits for the taxable year and the earnings and profits accumulated for prior taxable years beginning after December 31, 1975, and the amount of previously excluded subpart F income invested in less developed country corporations described in section 955(c)(2) (as in effect before the enactment of the T a x Keduction Act of 1975) to the extent attrib- Ante, p. 59. utable to earnings and profits accumulated for taxable years beginning after December 31, 1962. For purposes of this paragraph, if qualified investments in foreign base company shipping operations are disposed of by the controlled foreign corporation during the taxable year, the amount of the decrease in qualified investments in foreign base company shipping operations of such controlled foreign corporation for such year shall be reduced by an amount equal to the amount (if any) by which the losses on such dispositions during such year exceed the gains on such dispositions during such year. " (3) P R O RATA SHARE o r AMOUNT WITHDRAWN.—In the case of
any United States shareholder, the p r o rata share of the amount of previously excluded subpart F income of any controlled foreign corporation withdrawn from investment in foreign base company shipping operations for any taxable year is his pro rata share of the amount determined under paragraph (1). " (b) QUALIFIED INVESTMENTS I N FoREioif BASE COMPANY S H I P P I N G OPERATIONS.—
" (1) IN GENERAL.—For purposes of this subpart, the term 'qualified investments in foreign base company shipping operations' means investments in— " (A) any aircraft or vessel used in foreign commerce, and " (B) other assets which a r e u?ed in connection with the performance of services directly related to the use of any such aircraft or vessel. Such term includes, b u t is not limited to, investments by a controlled foreign corporation in stock or obligations of another controlled foreign corporation which is a related person (within the meaning of section 9 5 4 (d)(3)) and which holds assets 26 USC 954. described in the preceding sentence, but only to the extent that such assets are so used. "(2)
QUALIFIED INVESTMENTS BY RELATED PERSONS.—For p u r -
poses of determining the amount of qualified investments in foreign base company shipping operations, an investment (or a decrease in investment) in such operations by one or more controlled foreign corporations may, under regulations prescribed by the Secretary or his delegate, be treated as an investment (or a decrease in investment) by another corporation which is a controlled foreign corporation and is a related person (as defined
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