Summary: S.2086 — 104th Congress (1995-1996)All Information (Except Text)

There is one summary for S.2086. Bill summaries are authored by CRS.

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Introduced in Senate (09/17/1996)


Title I: Treatment of Passive Foreign Investment Companies

Title II: Treatment of Controlled Foreign Corporations

Title III: Other Provisions

International Tax Simplification for American Competitiveness Act - Title I: Treatment of Passive Foreign Investment Companies - Amends the Internal Revenue Code to exempt U.S. shareholders of a controlled foreign corporation from passive foreign investment company (PFIC) inclusion.

(Sec. 102) Allows a U.S shareholder of a PFIC to elect to include the difference between such stock's fair market value and adjusted basis as income, or the difference between adjusted basis and fair market value or unreversed inclusions as a deduction.

(Sec. 103) Modifies the definition of "passive income" and the asset valuation test.

Title II: Treatment of Controlled Foreign Corporations - Amends the Code to treat as dividends the gain on certain stock sales by controlled foreign corporations.

(Sec. 203) Revises specified indirect (deemed taxes paid) foreign tax credit provisions.

(Sec. 204) Excludes certain active finance-related income from inclusion as foreign personal holding company income.

(Sec. 205) Repeals the separate foreign tax credit limitation (separate basket rule) for certain noncontrolled U.S.-foreign corporations. Applies "look-thru" rules to such entities.

(Sec. 206) Treats European Union countries as a single country for certain controlled foreign corporation income purposes.

(Sec. 209) Allows affiliated foreign insurance companies to offset losses.

Title III: Other Provisions - Amends the Code with respect to certain foreign tax credit determinations to provide that accrued taxes shall be translated into dollars by using the average exchange rate for the year to which such taxes relate.

(Sec. 302) Allows a taxpayer to elect a specified alternative minimum foreign tax credit limitation.

(Sec. 303) Provides for recognition of taxable gain with respect to certain property transfers by a U.S. person to a foreign corporation.

(Sec. 306) Applies uniform capitalization rules to foreign taxpayers with respect to income connected with the conduct of a U.S. trade or business.

(Sec. 307) Extends the excess foreign tax carryover or carryback period.

(Sec. 308) Provides for recharacterization of overall domestic loss by treating certain U.S. source income as non-U.S. source income.

(Sec. 309) Treats as non-U.S. source income compensation earned by nonresident alien aircraft or vessel crew members for services in the United States.

(Sec. 310) Includes computer software within the category of foreign sales corporation (FSC) property.

(Sec. 311) Provides special rules with respect to financial services income and interest.

(Sec. 312) Excludes from consideration as U.S. property certain assets acquired by securities or commodities dealers.