by reason of such agreement shall be recognized
as of the date of such disposition.
‘‘(D) SECRETARY MAY EXTEND PERIOD.—
To the extent provided in regulations prescribed
by the Secretary, subparagraph (B) shall be ap-
plied by substituting the 15-year period begin-
ning 5 years before the loss of United States citi-
zenship for the 10-year period referred to therein.
‘‘(E) SECRETARY MAY REQUIRE RECOGNI-
TION OF GAIN IN CERTAIN CASES.—To the extent
provided in regulations prescribed by the Sec-
retary—
‘‘(i) the removal of appreciated tan-
gible personal property from the United
States, and
‘‘(ii) any other occurrence which (with-
out recognition of gain) results in a change
in the source of the income or gain from
property from sources within the United
States to sources outside the United States,
shall be treated as an exchange to which this
paragraph applies.
‘‘(3) SUBSTANTIAL
DIMINISHING
OF
RISKS
OF
OWNERSHIP.—For purposes of determining whether
this section applies to any gain on the sale or ex-
change of any property, the running of the 10-year
period described in subsection (a) shall be suspended
for any period during which the individual’s risk of
loss with respect to the property is substantially di-
minished by—
‘‘(A) the holding of a put with respect to
such property (or similar property),
‘‘(B) the holding by another person of a
right to acquire the property, or
‘‘(C) a short sale or any other transaction.’’
(d) CREDIT FOR FOREIGN TAXES IMPOSED ON UNITED
STATES SOURCE INCOME.—
(1) Subsection (b) of section 877 of such Code is
amended by adding at the end the following new sen-
tence: ‘‘The tax imposed solely by reason of this sec-
tion shall be reduced (but not below zero) by the
amount of any income, war profits, and excess profits
taxes (within the meaning of section 903) paid to any
foreign country or possession of the United States on
any income of the taxpayer on which tax is imposed
solely by reason of this section.’’
(2) Subsection (a) of section 877 of such Code, as
amended by subsection (a), is amended by inserting
‘‘(after any reduction in such tax under the last sen-
tence of such subsection)’’ after ‘‘such subsection’’.
(e) COMPARABLE ESTATE
AND GIFT TAX TREAT-
MENT.—
(1) ESTATE TAX.—
(A) IN GENERAL.—Subsection (a) of section
2107 of such Code is amended to read as follows:
‘‘(a) TREATMENT OF EXPATRIATES.—
‘‘(1) RATE OF TAX.—A tax computed in accord-
ance with the table contained in section 2001 is here-
by imposed on the transfer of the taxable estate, deter-
mined as provided in section 2106, of every decedent
nonresident not a citizen of the United States if,
within the 10-year period ending with the date of
death, such decedent lost United States citizenship,
unless such loss did not have for 1 of its principal
purposes the avoidance of taxes under this subtitle or
subtitle A.
‘‘(2) CERTAIN INDIVIDUALS TREATED AS HAVING
TAX AVOIDANCE PURPOSE.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), an individual shall be treated as hav-
ing a principal purpose to avoid such taxes if
such individual is so treated under section
877(a)(2).
‘‘(B) EXCEPTION.—Subparagraph (A) shall
not apply to a decedent meeting the requirements
of section 877(c)(1).’’
(B) CREDIT FOR FOREIGN DEATH TAXES.—
Subsection (c) of section 2107 of such Code is
amended by redesignating paragraph (2) as
paragraph (3) and by inserting after paragraph
(1) the following new paragraph:
‘‘(2) CREDIT FOR FOREIGN DEATH TAXES.—
‘‘(A) IN
GENERAL.—The tax imposed by
subsection (a) shall be credited with the amount
of any estate, inheritance, legacy, or succession
taxes actually paid to any foreign country in re-
spect of any property which is included in the
gross estate solely by reason of subsection (b).
‘‘(B) LIMITATION ON CREDIT.—The credit
allowed by subparagraph (A) for such taxes paid
to a foreign country shall not exceed the lesser
of—
‘‘(i) the amount which bears the same
ratio to the amount of such taxes actually
paid to such foreign country in respect of
property included in the gross estate as the
value of the property included in the gross
estate solely by reason of subsection (b)
bears to the value of all property subjected
to such taxes by such foreign country, or
‘‘(ii) such property’s proportionate
share of the excess of—
‘‘(I) the tax imposed by subsection
(a), over
‘‘(II) the tax which would be im-
posed by section 2101 but for this sec-
tion.
‘‘(C) PROPORTIONATE
SHARE.—For pur-
poses of subparagraph (B), a property’s propor-
tionate share is the percentage which the value of
the property which is included in the gross estate
solely by reason of subsection (b) bears to the
total value of the gross estate.’’
(C) EXPANSION OF INCLUSION IN GROSS ES-
TATE OF STOCK OF FOREIGN CORPORATIONS.—
Paragraph (2) of section 2107(b) of such Code is
amended by striking ‘‘more than 50 percent of’’
and all that follows and inserting ‘‘more than 50
percent of—
‘‘(A) the total combined voting power of all
classes of stock entitled to vote of such corpora-
tion, or
‘‘(B) the total value of the stock of such cor-
poration,’’.
(2) GIFT TAX.—
(A) IN GENERAL.—Paragraph (3) of section
2501(a) of such Code is amended to read as fol-
lows:
‘‘(3) EXCEPTION.—
‘‘(A) CERTAIN
INDIVIDUALS.—Paragraph
(2) shall not apply in the case of a donor who,
within the 10-year period ending with the date
of transfer, lost United States citizenship, unless
such loss did not have for 1 of its principal pur-
poses the avoidance of taxes under this subtitle or
subtitle A.
‘‘(B) CERTAIN
INDIVIDUALS
TREATED
AS
HAVING
TAX
AVOIDANCE
PURPOSE.—For pur-
poses of subparagraph (A), an individual shall
be treated as having a principal purpose to
avoid such taxes if such individual is so treated
under section 877(a)(2).
‘‘(C) EXCEPTION
FOR
CERTAIN
INDIVID-
UALS.—Subparagraph (B) shall not apply to a
decedent meeting the requirements of section
877(c)(1).
‘‘(D) CREDIT FOR FOREIGN GIFT TAXES.—
The tax imposed by this section solely by reason
of this paragraph shall be credited with the
amount of any gift tax actually paid to any for-
eign country in respect of any gift which is tax-
able under this section solely by reason of this
paragraph.’’
(f) COMPARABLE TREATMENT
OF LAWFUL PERMA-
NENT RESIDENTS WHO CEASE TO BE TAXED AS RESI-
DENTS.—
(1) IN GENERAL.—Section 877 of such Code is
amended by redesignating subsection (e) as subsection
(f) and by inserting after subsection (d) the following
new subsection:
‘‘(e) COMPARABLE TREATMENT OF LAWFUL PERMA-
NENT RESIDENTS WHO CEASE TO BE TAXED AS RESI-
DENTS.—
‘‘(1) IN GENERAL.—Any long-term resident of
the United States who—
‘‘(A) ceases to be a lawful permanent resi-
dent of the United States (within the meaning of
section 7701(b)(6)), or
‘‘(B) commences to be treated as a resident
of a foreign country under the provisions of a
tax treaty between the United States and the for-
eign country and who does not waive the benefits
of such treaty applicable to residents of the for-
eign country,
shall be treated for purposes of this section and sec-
tions 2107, 2501, and 6039F in the same manner as
if such resident were a citizen of the United States
who lost United States citizenship on the date of such
cessation or commencement.
‘‘(2) LONG-TERM
RESIDENT.—For purposes of
this subsection, the term ‘long-term resident’ means
any individual (other than a citizen of the United
States) who is a lawful permanent resident of the
United States in at least 8 taxable years during the
period of 15 taxable years ending with the taxable
year during which the event described in subpara-
graph (A) or (B) of paragraph (1) occurs. For pur-
poses of the preceding sentence, an individual shall
not be treated as a lawful permanent resident for any
taxable year if such individual is treated as a resi-
dent of a foreign country for the taxable year under
the provisions of a tax treaty between the United
States and the foreign country and does not waive the
benefits of such treaty applicable to residents of the
foreign country.
‘‘(3) SPECIAL RULES.—
‘‘(A) EXCEPTIONS
NOT
TO
APPLY.—Sub-
section (c) shall not apply to an individual who
is treated as provided in paragraph (1).
‘‘(B) STEP-UP IN BASIS.—Solely for pur-
poses of determining any tax imposed by reason
of this subsection, property which was held by
the long-term resident on the date the individual
first became a resident of the United States shall
be treated as having a basis on such date of not
less than the fair market value of such property
on such date. The preceding sentence shall not
apply if the individual elects not to have such
sentence apply. Such an election, once made,
shall be irrevocable.
‘‘(4) AUTHORITY
TO
EXEMPT
INDIVIDUALS.—
This subsection shall not apply to an individual who
is described in a category of individuals prescribed by
regulation by the Secretary.
‘‘(5) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be appropriate to
carry out this subsection, including regulations pro-
viding for the application of this subsection in cases
where an alien individual becomes a resident of the
United States during the 10-year period after being
treated as provided in paragraph (1).’’
(2) CONFORMING AMENDMENTS.—
(A) Section 2107 of such Code is amended
by striking subsection (d), by redesignating sub-
section (e) as subsection (d), and by inserting
after subsection (d) (as so redesignated) the fol-
lowing new subsection:
‘‘(e) CROSS REFERENCE.—
‘‘For comparable treatment of long-term lawful
permanent residents who ceased to be taxed as resi-
dents, see section 877(e).’’
(B) Paragraph (3) of section 2501(a) of
such Code (as amended by subsection (e)) is
amended by adding at the end the following new
subparagraph:
‘‘(E) CROSS REFERENCE.—
‘‘For comparable treatment of long-term lawful
permanent residents who ceased to be taxed as resi-
dents, see section 877(e).’’
(g) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section shall apply to—
(A) individuals losing United States citi-
zenship (within the meaning of section 877 of the
Internal Revenue Code of 1986) on or after Feb-
ruary 6, 1995, and
(B) long-term residents of the United States
with respect to whom an event described in sub-
paragraph (A) or (B) of section 877(e)(1) of such
Code occurs on or after June 13, 1995.
(2) SPECIAL RULE.—
(A) IN GENERAL.—In the case of an indi-
vidual who performed an act of expatriation
specified in paragraph (1), (2), (3), or (4) of sec-
tion 349(a) of the Immigration and Nationality
Act (8 U.S.C. 1481(a)(1)–(4)) before February 6,
1995, but who did not, on or before such date,
furnish to the United States Department of State
a signed statement of voluntary relinquishment
of United States nationality confirming the per-
formance of such act, the amendments made by
this section shall apply to such individual except
that—
(i) the 10-year period described in sec-
tion 877(a) of such Code shall not expire be-
fore the end of the 10-year period beginning
on the date such statement is so furnished,
and
(ii) the 1-year period referred to in sec-
tion 877(c) of such Code, as amended by
this section, shall not expire before the date
which is 1 year after the date of the enact-
ment of this Act.
(B) EXCEPTION.—Subparagraph (A) shall
not apply if the individual establishes to the sat-
isfaction of the Secretary of the Treasury that
such loss of United States citizenship occurred
before February 6, 1994.
SEC. 3. INFORMATION ON INDIVIDUALS LOSING UNITED
STATES CITIZENSHIP.
(a) IN GENERAL.—Subpart A of part III of subchapter
A of chapter 61 of the Internal Revenue Code of 1986 is
amended by inserting after section 6039E the following new
section:
‘‘SEC. 
6039F. 
INFORMATION 
ON 
INDIVIDUALS 
LOSING
UNITED STATES CITIZENSHIP.
‘‘(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, any individual who loses United States citizen-
ship (within the meaning of section 877(a)) shall provide
a statement which includes the information described in
subsection (b). Such statement shall be—
‘‘(1) provided not later than the earliest date of
any act referred to in subsection (c), and
‘‘(2) provided to the person or court referred to
in subsection (c) with respect to such act.
‘‘(b) INFORMATION TO BE PROVIDED.—Information
required under subsection (a) shall include—
‘‘(1) the taxpayer’s TIN,