‘‘(vii) proceeds from other financial 
transactions. 
‘‘(C) FINANCIAL INSTRUMENT.—The term 
‘financial instrument’ means any— 
‘‘(i) share of stock in a corporation, 
‘‘(ii) equity ownership in any widely 
held or publicly traded partnership, trust, 
or other business entity, 
‘‘(iii) note, bond, debenture, or other 
evidence of indebtedness, 
‘‘(iv) interest rate, currency, or equity 
notional principal contract, 
‘‘(v) evidence or interest in, or a de-
rivative financial instrument in, any finan-
cial instrument described in clause (i), (ii), 
(iii), or (iv), or any currency, including any 
option, forward contract, short position, 
and any similar financial instrument in 
such a financial instrument or currency, 
and 
‘‘(vi) a position which— 
‘‘(I) is not a financial instrument 
described in clause (i), (ii), (iii), or 
(iv), 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
‘‘(II) is a hedge with respect to 
such a financial instrument, and 
‘‘(III) is clearly identified in the 
dealer’s records as being described in 
this subparagraph before the close of 
the day on which it was acquired or 
entered into. 
‘‘(c) DEDUCTIBLE AMOUNTS.— 
‘‘(1) IN
GENERAL.—The term ‘deductible 
amounts’ includes for a taxable year with respect to 
a business entity— 
‘‘(A) the cost of business purchases in the 
taxable year (as determined under subsection 
(d)), 
‘‘(B) compensation expenses for an indi-
vidual (other than amounts paid to an indi-
vidual in his capacity as a business entity), or 
‘‘(C) the cost of employer-provided health 
insurance for which the employee, members of 
his family, or persons designated by him or 
members of his family are the beneficiaries, 
‘‘(D) such entity’s loss carryover deduction 
(determined under section 172), 
‘‘(E) in the case of an entity which is a 
real estate investment trust, the amount of any 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
dividend payment made to a shareholder of 
such trust, and 
‘‘(F) the transition basis deduction (as de-
termined under section 5 of the American Busi-
ness Competitiveness Act of 2015). 
‘‘(2) COMPENSATION EXPENSES.—For purposes 
of subsection (a), the term ‘compensation expenses’ 
means— 
‘‘(A) wages, salaries or other cash payable 
for services, 
‘‘(B) any taxes imposed on the recipient 
that are withheld by the business entity, 
‘‘(C) the cost of property purchased to pro-
vide employees with compensation (other than 
property incidental to the provision of fringe 
benefits that are excluded from income under 
the individual tax), and 
‘‘(D) the cost of fringe benefits other than 
health insurance deductible under paragraph 
(1)(C). 
‘‘(3) PASS-THRU
WAGES
MUST
BE
REASON-
ABLE.—For purposes of paragraph (2)(A), amounts 
payable as wages, salaries or other cash payable for 
services by a S corporation, partnership, or other 
pass-thru entity shall not be treated as wages, sala-
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
ries or other cash payable for services unless such 
amounts are reasonable for the service rendered. 
‘‘(d) COST OF BUSINESS PURCHASES.— 
‘‘(1) BUSINESS PURCHASES.— 
‘‘(A) IN
GENERAL.—The term ‘business 
purchases’ means the acquisition of— 
‘‘(i) property, 
‘‘(ii) the use of property, or 
‘‘(iii) services, 
for use in a business activity. 
‘‘(B) EXAMPLES.—Business purchases in-
clude (without limitation) the— 
‘‘(i) purchase or rental of real prop-
erty, 
‘‘(ii) purchase or rental of capital 
equipment, 
‘‘(iii) purchase of supplies and inven-
tory, 
‘‘(iv) purchase of services from inde-
pendent contractors, and 
‘‘(v) imports for use in a business ac-
tivity. 
‘‘(C) EXCLUSIONS.—Business purchases 
do not include— 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
‘‘(i) payments for use of money or 
capital, such as interest or dividends (ex-
cept to the extent that a portion so paid is 
a fee for financial intermediation services), 
‘‘(ii) premiums for life insurance, 
‘‘(iii) the acquisition of savings assets 
or other financial instruments (as defined 
in subsection (b)(5)(C)), 
‘‘(iv) taxes (except as provided in sub-
section (b)(2) relating to product taxes), 
and 
‘‘(v) the cost of financial instruments 
(as defined in subsection (b)(5)(C)). 
‘‘(2) COST OF BUSINESS PURCHASES.— 
‘‘(A) IN GENERAL.—The term ‘cost of a 
business purchase’ is the amount paid or to be 
paid for the business purchase. 
‘‘(B) PROPERTY AND SERVICES ACQUIRED 
FOR PROPERTY.—If a business entity receives 
property or services from a business entity in 
whole or partial exchange for property or serv-
ices, the property or services acquired shall be 
treated as if they were purchased for an 
amount equal to the fair market value of the 
services or property received. For purposes of 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
this section, property includes stock and other 
equity interests in business other than stock or 
an equity interest in the business entity acquir-
ing the property or services. See section 1422 
for rules on property or services received in ex-
change for an equity interest in the recipient. 
‘‘(C) GAMBLING PAYMENTS.—In the case 
of a business involving gambling, lotteries, or 
other games of chance, business purchases in-
clude amounts paid to winners. 
‘‘(e) BUSINESS ENTITY AND BUSINESS ACTIVITY.— 
‘‘(1) BUSINESS ENTITY.—For purposes of de-
termining business income, the term ‘business entity’ 
means any corporation (including any S corpora-
tion), unincorporated association, partnership, lim-
ited liability company, proprietorship, independent 
contractor, individual, or any other person, engaging 
in business activity in the United States. An indi-
vidual shall be considered a business entity only with 
respect to the individual’s business activities. 
‘‘(2) BUSINESS ACTIVITY.—The term ‘business 
activity’ means the sale of property or services, the 
leasing of property, the development of property or 
services for subsequent sale or use in producing 
property or services for subsequent sale. The term 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
‘business activity’ does not include casual or occa-
sional sales of property used by an individual (other 
than in a business activity), such as the sale by an 
individual of a vehicle used by the individual. 
‘‘(3) EXCEPTION FOR CERTAIN EMPLOYEES.— 
‘‘(A) IN
GENERAL.—The term ‘business 
activity’ does not include— 
‘‘(i) the performance of services by an 
employee for an employer that is a busi-
ness entity with respect to the activity in 
which the employee is engaged, or 
‘‘(ii) the performance of regular do-
mestic household services (including baby-
sitting, housecleaning, and lawn cutting) 
by an employee of an employer that is an 
individual or family. 
‘‘(B) EMPLOYEE DEFINED.—For purposes 
of this subsection, the term ‘employee’ includes 
an individual partner who provides services to a 
partnership or an individual member who pro-
vides services to a limited liability company, or 
a proprietor with respect to compensation for 
services from his proprietorship. 
‘‘(f) SAVINGS ASSETS.—The term ‘savings assets’ 
means stocks, bonds, securities, certificates of deposits, in-
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
vestments in partnerships and limited liability companies, 
shares of mutual funds, life insurance policies, annuities, 
and other similar savings or investment assets. 
‘‘Subchapter B—Capital Contributions, 
Mergers, Acquisitions, and Distributions 
‘‘Sec. 1422. Contributions to a business entity. 
‘‘Sec. 1422A. Distributions of property. 
‘‘Sec. 1422B. Asset acquisitions. 
‘‘Sec. 1422C. Mergers, stock acquisitions, and spin-offs, split-offs, etc. 
‘‘SEC. 1422. CONTRIBUTIONS TO A BUSINESS ENTITY. 
‘‘(a) BY BUSINESS ENTITY.— 
‘‘(1) CASH.—If a business entity contributes 
cash to a business entity of which it is or becomes 
a partial or full owner, the amount contributed is 
not a deductible amount to the contributor or a tax-
able receipt to the recipient. 
‘‘(2) PROPERTY OR SERVICES.—If a business 
entity contributes property or services to a business 
entity of which it is or becomes a partial or full 
owner, the transaction will not result in taxable re-
ceipts to the contributor or a deduction for a busi-
ness purchase for the recipient and will not con-
stitute a sale resulting in taxable receipts to the con-
tributor. 
‘‘(b) BY INDIVIDUAL.— 
‘‘(1) CASH.—If an individual contributes cash 
to a business entity, the amount contributed is not 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
a deductible amount to the contributor and the cash 
received by the business entity is not a taxable re-
ceipt. 
‘‘(2) NEW PROPERTY.—If an individual contrib-
utes to a business entity property that the individual 
purchased for the business entity but which was not 
used by any person after its purchase, the property 
shall be considered purchased by such business enti-
ty from the person from which the individual pur-
chased the property and the transaction will not re-
sult in a deductible amount to the contributor. 
‘‘(3) PERSONAL USE PROPERTY.— 
‘‘(A) IN GENERAL.—If an individual con-
tributes personal use property to a business en-
tity in which the individual has an ownership 
interest or for which the individual receives an 
ownership interest, the business entity shall not 
be permitted to deduct the value of the property 
received as a business expense. The business 
entity will have a tax basis in the contributed 
property equal to the contributor’s basis. 
‘‘(B) PERSONAL
USE
PROPERTY.—The 
term ‘personal use property’ means any prop-
erty used by an individual at any time other 
than in a business activity. 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
‘‘(4) SERVICES.—If an individual contributes 
services to a business entity in which the individual 
has an ownership interest or receives an ownership 
interest, the business entity shall not be permitted to 
deduct the value of the services received (or the 
value of the equity interest provided to the services 
provider). 
‘‘SEC. 1422A. DISTRIBUTIONS OF PROPERTY. 
‘‘(a) DISTRIBUTIONS OTHER THAN TO CONTROL-
LING BUSINESS.—If a business entity distributes all or a 
portion of its assets to its owners (other than a controlling 
business entity), the business entity will be treated as if 
it sold the assets to its owners at fair market value. The 
fair market value will be determined by the distributing 
business entity and those determinations, unless unreason-
able, will be binding on the recipients. 
‘‘(b) DISTRIBUTIONS
TO
A CONTROLLING BUSI-
NESS.—If a business entity distributes all or a portion of 
its assets to a controlling business entity, the controlling 
business entity will assume the distributing entity’s tax 
attributes with respect to the assets and neither entity will 
have taxable receipts or a deduction as a result of the 
transaction. 
‘‘(c) DISTRIBUTION
OF
PERSONAL
USE
PROP-
ERTY.—If personal use property is distributed to the indi-
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
vidual who contributed the personal use property to a busi-
ness entity, the fair market value of the property for pur-
poses of subsection (a) shall equal the basis of the prop-
erty plus any enhancement in value of the property attrib-
utable to business purchases with respect to the property. 
‘‘(d) CONTROLLING BUSINESS ENTITY.—A business 
entity is a ‘controlling business entity’ with respect to an-
other business entity if it, or any person to which it is 
related, owns directly or indirectly more than 50 percent 
of the profits or capital interest in the other business enti-
ty. For purposes of the preceding sentence, a person is 
related to a business entity if such person owns directly 
or indirectly more than 50 percent of the profits or capital 
interest in the business entity. 
‘‘(e) APPLICATION OF THIS SECTION.—This section 
applies to both liquidating and nonliquidating distribu-
tions. 
‘‘SEC. 1422B. ASSET ACQUISITIONS. 
‘‘(a) IN GENERAL.—If a business entity transfers 
some or all of its assets, the consideration received for 
such assets shall be allocated among the assets transferred 
in the same manner as was required by section 1060 of 
the Internal Revenue Code of 1986. If the transferee and 
transferor agree in writing on the allocation of any consid-
eration, or as to the fair market value of any of the assets, 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
such agreement shall be binding on both the transferor 
and transferee unless the Secretary determines that such 
allocation (or fair market value) is not appropriate. 
‘‘(b) TAX CONSEQUENCES.—The tax consequences of 
an asset acquisition shall be determined in accordance 
with the rules of this chapter and shall be dependent upon 
allocations made under subsection (a). In general, consid-
eration allocable to savings assets, such as stock in an-
other business entity, would not be included in taxable re-
ceipts of the transferor and would not be a business pur-
chase of the purchaser, but consideration allocable to the 
sale of tangible property and intangible property (other 
than savings assets) will constitute taxable receipts of the 
seller and a business purchase of the purchaser. 
‘‘(c) ELECTION TO TREAT ASSET ACQUISITION AS A 
STOCK ACQUISITION.—In the case of the sale of substan-
tially all of the assets of a business entity or substantially 
all of the assets of a line of business or a separately stand-
ing business of a business entity, the transferee and trans-
feror can jointly elect to treat the acquisition as if it were 
an acquisition of the stock of a business entity holding 
the assets so transferred. In such case, the rules of section 
1422C shall apply. 
‘‘(d) AUTHORITY TO REQUIRE ALLOCATION AGREE-
MENT AND NOTICE TO THE SECRETARY.—If the Sec-
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
retary determines that certain types of asset acquisitions 
have significant possibilities of tax avoidance, the Sec-
retary may require— 
‘‘(1) parties to such types of acquisitions to 
enter into agreements allocating consideration, 
‘‘(2) parties to acquisitions involving certain 
kinds of assets to enter into agreements allocating 
part of the consideration to those assets, or 
‘‘(3) parties to certain acquisitions to report in-
formation to the Secretary. 
‘‘(e) ASSET ACQUISITION RULES DO NOT APPLY IF 
CONSIDERATION INCLUDES EQUITY IN PURCHASER.— 
‘‘(1) IN GENERAL.—If a business entity issues 
its own equity or equity in a subsidiary or other con-
trolled entity as part of the consideration for the 
transfer of assets to it, the transaction shall be 
treated as a business purchase and not as an asset 
acquisition, and the taxpayer shall not be entitled to 
a loss carryover for any unused deduction attrib-
utable to the equity portion of such transfer. 
‘‘(2) EQUITY.—For purposes of this subsection, 
equity means— 
‘‘(A) stock, in the case of a corporation, 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
‘‘(B) partnership or similar interest, in the 
case of a partnership or limited liability com-
pany, and 
‘‘(C) an ownership interest or interest in 
profits in the case of any other business entity. 
‘‘SEC. 1422C. MERGERS, STOCK ACQUISITIONS, AND SPIN- 
OFFS, SPLIT-OFFS, ETC. 
‘‘(a) MERGERS.—A merger of one business entity 
into another or two businesses entities into a third busi-
ness entity or any other similar transaction shall have no 
direct consequences under the business cash flow tax. The 
surviving entity shall assume the tax attributes of the 
merged business entities, including any loss carryovers 
and credit carryovers. 
‘‘(b) STOCK ACQUISITION.—The acquisition of all or 
substantially all of the ownership interest in one business 
entity either for cash or in exchange for ownership in the 
acquiring entity or an entity controlled by the acquired 
entity shall have no direct consequences under the busi-
ness cash flow tax. 
‘‘(c) SPIN-OFFS, SPLIT-OFFS, ETC.—A spin-off, 
split-off or split-up of a business entity shall have no direct 
tax consequences under this chapter. 
‘‘Subchapter C—International Provisions 
‘‘Sec. 1423. No tax imposed on income derived from trade or business outside 
the United States. 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6211
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
‘‘Sec. 1423A. No credit allowed for foreign taxes on income derived from trade 
or business outside the United States. 
‘‘Sec. 1423B. 5-percent toll charge on undistributed foreign earnings. 
‘‘SEC. 1423. NO TAX IMPOSED ON INCOME DERIVED FROM 
TRADE OR BUSINESS OUTSIDE THE UNITED 
STATES. 
‘‘(a) IN GENERAL.—Only taxable receipts and de-
ductible amounts which are effectively connected with the 
conduct of a trade or business within the United States 
shall be included or deducted in the computation of net 
business income. 
‘‘(b) No tax shall be imposed under this title on in-
come effectively connected with the conduct of a trade or 
business that is not a trade or business within the United 
States. 
‘‘SEC. 1423A. NO CREDIT ALLOWED FOR FOREIGN TAXES ON 
INCOME DERIVED FROM TRADE OR BUSI-
NESS OUTSIDE THE UNITED STATES. 
‘‘(a) IN GENERAL.—No credit shall be allowed under 
this title for any income, war profits, or excess profits 
taxes paid or accrued with respect to income effectively 
connected with the conduct of a trade or business that 
is not a trade or business within the United States. 
‘‘(b) UNUSED FOREIGN TAX CREDITS.—Under regu-
lations prescribed by the Secretary, any taxpayer that is 
a corporation may elect to treat foreign tax credit 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
carryovers from taxable years beginning prior to January 
1, 2015, as general business credit carryovers. 
‘‘SEC. 1423B. 5-PERCENT TOLL CHARGE ON UNDISTRIB-
UTED FOREIGN EARNINGS. 
‘‘There is hereby imposed on any domestic corpora-
tion which owns 10 percent or more of the voting stock 
of a foreign corporation a tax equal to 5 percent of the 
corporation’s post-1986 undistributed earnings for the 
corporation’s last taxable year beginning prior to January 
1, 2015. For purposes of this subsection, post-1986 undis-
tributed earnings shall be computed as provided in section 
902(c)(1) of the Internal Revenue Code of 1986 (as in 
effect prior to the enactment of the American Business 
Competitiveness Act of 2015), except that such undistrib-
uted earnings shall be diminished by the dividends distrib-
uted during such taxable year. Except as provided in regu-
lations prescribed by the Secretary, the tax imposed by 
this subsection shall be paid at the same time and in the 
same manner as the tax imposed by section 11 for the 
corporation’s first taxable year beginning on or after Jan-
uary 1, 2015. 
‘‘Subchapter D—Financial Institutions 
‘‘Sec. 1424. Real-plus-financial treatment of certain transactions involving fi-
nancial institutions. 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6211
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
‘‘SEC. 1424. REAL-PLUS-FINANCIAL TREATMENT OF CER-
TAIN TRANSACTIONS INVOLVING FINANCIAL 
INSTITUTIONS. 
‘‘(a) TAXATION OF TRANSACTIONS BETWEEN FINAN-
CIAL INSTITUTIONS AND BUSINESSES.— 
‘‘(1) GENERAL RULE.—In the case of a tax-
payer that is a financial institution, taxable receipts 
shall include all amounts received in covered finan-
cial transactions and deductible amounts and shall 
include all amounts paid in covered financial trans-
actions. 
‘‘(2) FINANCIAL INSTITUTIONS.—For purposes 
of this section, ‘financial institution’ shall mean, 
under regulations prescribed by the Secretary, any 
business entity that is regulated by any Federal or 
State agency as a financial institution. Such term 
includes regulated banks, insurance companies, in-
vestment banks, securities brokers, and mutual 
funds. Such term does not include credit unions. 
‘‘(3) COVERED
FINANCIAL
TRANSACTIONS.— 
For purposes of this section, ‘covered financial 
transactions’ shall mean transactions between a fi-
nancial institution and a party that is not a business 
entity as defined in section 1421(e)(1). Under regu-
lations prescribed by the Secretary, transactions that 
do not involve any significant provision of financial 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
services (other than services for which explicit fees 
are charged) shall be treated as not being covered fi-
nancial transactions. 
‘‘(b) TRANSITION RULE.—Under regulations pre-
scribed by the Secretary, a tax is imposed on any financial 
institution equal to 25 percent of the institution’s net 
claims against parties that are not business entities, as 
defined in section 1421(e)(1). Such claims shall be valued 
at the end of the financial institution’s last taxable year 
beginning before January 1, 2015, with value measured 
by the institution’s basis in such claims. Except as pro-
vided in regulations prescribed by the Secretary, the tax 
imposed by this subsection shall be paid at the same time 
and in the same manner as the net business income tax 
for the financial institution’s first taxable year beginning 
on or after January 1, 2015. 
‘‘Subchapter E—Other Definitions 
‘‘Sec. 1425. Other definitions. 
‘‘SEC. 1425. OTHER DEFINITIONS. 
‘‘(a) IN GENERAL.—When used in this chapter, 
where not otherwise distinctly expressed or manifestly in-
compatible with the intent thereof— 
‘‘(1) UNITED
STATES.—The term ‘United 
States’ includes the States and the District of Co-
lumbia. 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS
‘‘(2) TREATMENT OF POSSESSIONS.— 
‘‘(A) IN GENERAL.—For purposes of this 
chapter, the United States possessions shall not 
be treated as part of the United States. 
‘‘(B) POSSESSION.—For purposes of para-
graph (1), ‘United States possession’ or ‘posses-
sion’ means a possession of the United States 
and includes the Commonwealth of Puerto Rico, 
the Commonwealth of the Northern Marianas 
Islands, Guam, American Samoa, and the 
United States Virgin Islands. 
‘‘(3) DEFINITIONS GENERALLY.—Any definition 
included in this chapter shall apply for all purposes 
of this chapter unless— 
‘‘(A) such definition is limited to the pur-
poses of a particular chapter, section, or sub-
section, or 
‘‘(B) the definition clearly would not be ap-
plicable in a particular context. 
‘‘(b) INTERPRETATIONS CONSISTENT WITH REST OF 
INTERNAL REVENUE CODE OF 1986.—Terms not defined 
in this chapter, but defined elsewhere in this title, shall 
be interpreted in a manner consistent with this title, ex-
cept to the extent such interpretation would be incon-
sistent with the principles and purposes of this chapter.’’. 
VerDate Sep 11 2014 
23:34 Jan 13, 2016
Jkt 059200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H4377.IH
H4377
SSpencer on DSK4SPTVN1PROD with BILLS