26 U.S.C. § 951 : US Code - Section 951: Amounts included in gross income of United States shareholders

Search 26 U.S.C. § 951 : US Code - Section 951: Amounts included in gross income of United States shareholders

    (a) Amounts included
      (1) In general
        If a foreign corporation is a controlled foreign corporation
      for an uninterrupted period of 30 days or more during any taxable
      year, every person who is a United States shareholder (as defined
      in subsection (b)) of such corporation and who owns (within the
      meaning of section 958(a)) stock in such corporation on the last
      day, in such year, on which such corporation is a controlled
      foreign corporation shall include in his gross income, for his
      taxable year in which or with which such taxable year of the
      corporation ends - 
          (A) the sum of - 
            (i) his pro rata share (determined under paragraph (2)) of
          the corporation's subpart F income for such year,
            (ii) his pro rata share (determined under section 955(a)(3)
          as in effect before the enactment of the Tax Reduction Act of
          1975) of the corporation's previously excluded subpart F
          income withdrawn from investment in less developed countries
          for such year, and
            (iii) his pro rata share (determined under section
          955(a)(3)) of the corporation's previously excluded subpart F
          income withdrawn from foreign base company shipping
          operations for such year; and

          (B) the amount determined under section 956 with respect to
        such shareholder for such year (but only to the extent not
        excluded from gross income under section 959(a)(2)).
      (2) Pro rata share of subpart F income
        The pro rata share referred to in paragraph (1)(A)(i) in the
      case of any United States shareholder is the amount - 
          (A) which would have been distributed with respect to the
        stock which such shareholder owns (within the meaning of
        section 958(a)) in such corporation if on the last day, in its
        taxable year, on which the corporation is a controlled foreign
        corporation it had distributed pro rata to its shareholders an
        amount (i) which bears the same ratio to its subpart F income
        for the taxable year, as (ii) the part of such year during
        which the corporation is a controlled foreign corporation bears
        to the entire year, reduced by
          (B) the amount of distributions received by any other person
        during such year as a dividend with respect to such stock, but
        only to the extent of the dividend which would have been
        received if the distribution by the corporation had been the
        amount (i) which bears the same ratio to the subpart F income
        of such corporation for the taxable year, as (ii) the part of
        such year during which such shareholder did not own (within the
        meaning of section 958(a)) such stock bears to the entire year.

      For purposes of subparagraph (B), any gain included in the gross
      income of any person as a dividend under section 1248 shall be
      treated as a distribution received by such person with respect to
      the stock involved.
      (3) Limitation on pro rata share of previously excluded subpart F
        income withdrawn from investment
        For purposes of paragraph (1)(A)(iii), the pro rata share of
      any United States shareholder of the previously excluded subpart
      F income of a controlled foreign corporation withdrawn from
      investment in foreign base company shipping operations shall not
      exceed an amount - 
          (A) which bears the same ratio to his pro rata share of such
        income withdrawn (as determined under section 955(a)(3)) for
        the taxable year, as
          (B) the part of such year during which the corporation is a
        controlled foreign corporation bears to the entire year.
    (b) United States shareholder defined
      For purposes of this subpart, the term "United States
    shareholder" means, with respect to any foreign corporation, a
    United States person (as defined in section 957(c)) who owns
    (within the meaning of section 958(a)), or is considered as owning
    by applying the rules of ownership of section 958(b), 10 percent or
    more of the total combined voting power of all classes of stock
    entitled to vote of such foreign corporation.
    (c) Coordination with passive foreign investment company provisions
      If, but for this subsection, an amount would be included in the
    gross income of a United States shareholder for any taxable year
    both under subsection (a)(1)(A)(i) and under section 1293 (relating
    to current taxation of income from certain passive foreign
    investment companies), such amount shall be included in the gross
    income of such shareholder only under subsection (a)(1)(A).