Page 141 - Tax Reform

PUBLIC LAW 115–97—DEC. 22, 2017 131 STAT. 2191

(b) APPLICATION OF HOLDING PERIOD REQUIREMENT.—Sub-
section (c) of section 246 is amended— 26 USC 246.
(1) by striking ‘‘or 245’’ in paragraph (1) and inserting
‘‘245, or 245A’’, and
(2) by adding at the end the following new paragraph:
‘‘(5) SPECIAL RULES FOR FOREIGN SOURCE PORTION OF DIVI-
DENDS RECEIVED FROM SPECIFIED 10-PERCENT OWNED FOREIGN
CORPORATIONS.—
‘‘(A) 1-YEAR HOLDING PERIOD REQUIREMENT.—For pur-
poses of section 245A—
‘‘(i) paragraph (1)(A) shall be applied—
‘‘(I) by substituting ‘365 days’ for ‘45 days’
each place it appears, and
‘‘(II) by substituting ‘731-day period’ for ‘91-
day period’, and
‘‘(ii) paragraph (2) shall not apply.
‘‘(B) STATUS MUST BE MAINTAINED DURING HOLDING
PERIOD.—For purposes of applying paragraph (1) with
respect to section 245A, the taxpayer shall be treated as
holding the stock referred to in paragraph (1) for any
period only if—
‘‘(i) the specified 10-percent owned foreign corpora-
tion referred to in section 245A(a) is a specified 10-
percent owned foreign corporation at all times during
such period, and
‘‘(ii) the taxpayer is a United States shareholder
with respect to such specified 10-percent owned foreign
corporation at all times during such period.’’.
(c) APPLICATION OF RULES GENERALLY APPLICABLE TO DEDUC-
TIONS FOR DIVIDENDS RECEIVED.—
(1) TREATMENT OF DIVIDENDS FROM CERTAIN CORPORA-
TIONS.—Paragraph (1) of section 246(a) is amended by striking
‘‘and 245’’ and inserting ‘‘245, and 245A’’.
(2) COORDINATION WITH SECTION 1059.—Subparagraph (B)
of section 1059(b)(2) is amended by striking ‘‘or 245’’ and
inserting ‘‘245, or 245A’’.
(d) COORDINATION WITH FOREIGN TAX CREDIT LIMITATION.—
Subsection (b) of section 904 is amended by adding at the end
the following new paragraph:
‘‘(5) TREATMENT OF DIVIDENDS FOR WHICH DEDUCTION IS
ALLOWED UNDER SECTION 245A.—For purposes of subsection (a),
in the case of a domestic corporation which is a United States
shareholder with respect to a specified 10-percent owned foreign
corporation, such shareholder’s taxable income from sources
without the United States (and entire taxable income) shall
be determined without regard to—
‘‘(A) the foreign-source portion of any dividend received
from such foreign corporation, and
‘‘(B) any deductions properly allocable or apportioned
to—
‘‘(i) income (other than amounts includible under
section 951(a)(1) or 951A(a)) with respect to stock of
such specified 10-percent owned foreign corporation,
or
‘‘(ii) such stock to the extent income with respect
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to such stock is other than amounts includible under
section 951(a)(1) or 951A(a).