26 U.S.C. § 955 : US Code - Section 955: Withdrawal of previously excluded subpart F income from qualified investment

Search 26 U.S.C. § 955 : US Code - Section 955: Withdrawal of previously excluded subpart F income from qualified investment

(a) General rules
(1) Amount withdrawn
For purposes of this subpart, 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subpart F income of any controlled foreign corporation withdrawn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 an amount equal to the decrease in the amount
of qualified investments in foreign base company shipping
operations of the controlled foreign corporation for such year,
but only to the extent that the amount of such decrease does not
exceed an amount equal to -
(A) the sum of the amounts excluded under section 954(b)(2)
from the foreign base company income of such corporation for
all prior taxable years beginning before 1987, reduced by
(B) the sum of the amounts of previously excluded subpart F
income withdrawn from investment in foreign base company
shipping operations of such corporation determined under this
subsection for all prior taxable years.
(2) Decrease in 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 as of the close of the last taxable year beginning
before 1987 (to the extent such amount exceeds the sum of the
decreases in qualified investments determined under this
paragraph for prior taxable years beginning after 1986),
exceeds
(B) the amount of qualified investments in foreign base
company shipping operations of the controlled foreign
corporation at 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 Tax Reduction Act of 1975) to the extent
attributable 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 corporations 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) Pro rata share of amount withdrawn
In the case of any United States shareholder, the pro 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 in foreign base company shipping
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 are used in connection with the
performance of services directly related to the use of any such
aircraft or vessel.
Such term includes, but 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 954(d)(3)) and which holds assets
described in the preceding sentence, but only to the extent that
such assets are so used.
(2) Qualified investments by related persons
For purposes of determining the amount of qualified investments
in foreign based 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, 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 in section
954(d)(3) with respect to the corporation actually making or
withdrawing the investment.
(3) Special rule
For purposes of this subpart, a United States shareholder of a
controlled foreign corporation may, under regulations prescribed
by the Secretary, elect to make the determinations under
subsection (a)(2) of this section and under subsection (g) of
section 954 as of the close of the years following the years
referred to in such subsections, or as of the close of such
longer period of time as such regulations may permit, in lieu of
on the last day of such years. Any election under this paragraph
made with respect to any taxable year shall apply to such year
and to all succeeding taxable years unless the Secretary consents
to the revocation of such election.
(4) Amount attributable to property
The amount taken into account under this subpart with respect
to any property described in paragraph (1) shall be its adjusted
basis, reduced by any liability to which such property is
subject.
(5) Income excluded under prior law
Amounts invested in less developed country corporations
described in section 955(c)(2) (as in effect before the enactment
of the Tax Reduction Act of 1975) shall be treated as qualified
investments in foreign base company shipping operations and shall
not be treated as investments in less developed countries for
purposes of section 951(a)(1)(A)(ii).