(g) AMENDMENTS RELATED TO SECTION 248 OF 
THE ACT.— 
(1) Subsection (c) of section 1356 is amend-
ed— 
(A) by striking paragraph (3), and 
(B) by adding at the end of paragraph (2) 
the following new flush sentence: 
‘‘Such term shall not include any core qualifying activi-
ties.’’. 
(2) The last sentence of section 1354(b) is 
amended by inserting ‘‘on or’’ after ‘‘only if made’’. 
(h) AMENDMENT RELATED TO SECTION 301 OF THE 
ACT.—Section 6427 is amended by striking subsection (f). 
(i) AMENDMENT RELATED TO SECTION 314 OF THE 
ACT.—Paragraph (2) of section 55(c) is amended by strik-
ing ‘‘regular tax’’ and inserting ‘‘regular tax liability’’. 
(j) AMENDMENTS RELATED TO SECTION 322 OF THE 
ACT.— 
(1) Subparagraph (C) of section 49(a)(1) is 
amended by inserting ‘‘and’’ at the end of clause (i), 
by striking ‘‘and’’ at the end of clause (ii), and by 
striking clause (iii). 
(2)(A) Subparagraph (B) of section 194(b)(1) 
is amended to read as follows:
‘‘(B) DOLLAR
LIMITATION.—The aggre-
gate amount of reforestation expenditures which 
may be taken into account under subparagraph 
(A) with respect to each qualified timber prop-
erty for any taxable year shall not exceed— 
‘‘(i) except as provided in clause (ii) 
or (iii), $10,000, 
‘‘(ii) in the case of a separate return 
by a married individual (as defined in sec-
tion 7703), $5,000, and 
‘‘(iii) in the case of a trust, zero.’’. 
(B) Paragraph (4) of section 194(c) is amended 
to read as follows: 
‘‘(4) TREATMENT OF TRUSTS AND ESTATES.— 
The aggregate amount of reforestation expenditures 
incurred by any trust or estate shall be apportioned 
between the income beneficiaries and the fiduciary 
under regulations prescribed by the Secretary. Any 
amount so apportioned to a beneficiary shall be 
taken into account as expenditures incurred by such 
beneficiary in applying this section to such bene-
ficiary.’’. 
(3) Subparagraph (C) of section 1245(a)(2) is 
amended by striking ‘‘or 193’’ and inserting ‘‘193, 
or 194’’.
(k) AMENDMENTS RELATED TO SECTION 336 OF 
THE ACT.— 
(1) Clause (iv) of section 168(k)(2)(A) is 
amended by striking ‘‘subparagraphs (B) and (C)’’ 
and inserting ‘‘subparagraph (B) or (C)’’. 
(2) Clause (iii) of section 168(k)(4)(B) is 
amended by striking ‘‘and paragraph (2)(C)’’ and 
inserting ‘‘or paragraph (2)(C) (as so modified)’’. 
(l) AMENDMENT RELATED TO SECTION 402 OF THE 
ACT.—Paragraph (2) of section 904(g) is amended to read 
as follows: 
‘‘(2) OVERALL DOMESTIC LOSS.—For purposes 
of this subsection— 
‘‘(A) IN GENERAL.—The term ‘overall do-
mestic loss’ means— 
‘‘(i) with respect to any qualified tax-
able year, the domestic loss for such tax-
able year to the extent such loss offsets 
taxable income from sources without the 
United States for the taxable year or for 
any preceding qualified taxable year by 
reason of a carryback, and 
‘‘(ii) with respect to any other taxable 
year, the domestic loss for such taxable 
year to the extent such loss offsets taxable
income from sources without the United 
States for any preceding qualified taxable 
year by reason of a carryback. 
‘‘(B) DOMESTIC
LOSS.—For purposes of 
subparagraph (A), the term ‘domestic loss’ 
means the amount by which the gross income 
for the taxable year from sources within the 
United States is exceeded by the sum of the de-
ductions properly apportioned or allocated 
thereto (determined without regard to any 
carryback from a subsequent taxable year). 
‘‘(C) QUALIFIED
TAXABLE
YEAR.—For 
purposes of subparagraph (A), the term ‘quali-
fied taxable year’ means any taxable year for 
which the taxpayer chose the benefits of this 
subpart.’’. 
(m) AMENDMENT RELATED TO SECTION 403 OF THE 
ACT.—Section 403 of the American Jobs Creation Act of 
2004 is amended by adding at the end the following new 
subsection: 
‘‘(d) TRANSITION RULE.—If the taxpayer elects (at 
such time and in such form and manner as the Secretary 
of the Treasury may prescribe) to have the rules of this 
subsection apply—
‘‘(1) the amendments made by this section shall 
not apply to taxable years beginning after December 
31, 2002, and before January 1, 2005, and 
‘‘(2) in the case of taxable years beginning after 
December 
31, 
2004, 
clause 
(iv) 
of 
section 
904(d)(4)(C) of the Internal Revenue Code of 1986 
(as amended by this section) shall be applied by sub-
stituting ‘January 1, 2005’ for ‘January 1, 2003’ 
both places it appears.’’. 
(n) AMENDMENTS RELATED TO SECTION 413 OF 
THE ACT.— 
(1) Subsection (b) of section 532 is amended by 
striking paragraph (2) and redesignating paragraphs 
(3) and (4) as paragraphs (2) and (3), respectively. 
(2) Subsection (b) of section 535 is amended by 
adding at the end the following new paragraph: 
‘‘(10) 
CONTROLLED
FOREIGN
CORPORA-
TIONS.—There shall be allowed as a deduction the 
amount of the corporation’s income for the taxable 
year which is included in the gross income of a 
United States shareholder under section 951(a). In 
the case of any corporation the accumulated taxable 
income of which would (but for this sentence) be de-
termined without allowance of any deductions, the 
deduction under this paragraph shall be allowed and
shall be appropriately adjusted to take into account 
any deductions which reduced such inclusion.’’. 
(o) AMENDMENT RELATED TO SECTION 415 OF THE 
ACT.—Subparagraph (D) of section 904(d)(2) is amended 
by inserting ‘‘as in effect before its repeal’’ after ‘‘section 
954(f)’’. 
(p) AMENDMENTS RELATED TO SECTION 418 OF 
THE ACT.— 
(1) The second sentence of section 897(h)(1) is 
amended— 
(A) by striking ‘‘any distribution’’ and all 
that follows through ‘‘any class of stock’’ and 
inserting ‘‘any distribution by a real estate in-
vestment trust with respect to any class of 
stock’’, and 
(B) by striking ‘‘the taxable year’’ and in-
serting ‘‘the 1-year period ending on the date of 
the distribution’’. 
(2) Subsection (c) of section 418 of the Amer-
ican Jobs Creation Act of 2004 is amended by strik-
ing ‘‘taxable years beginning after the date of the 
enactment of this Act’’ and inserting ‘‘any distribu-
tion by a real estate investment trust which is treat-
ed as a deduction for a taxable year of such trust
beginning after the date of the enactment of this 
Act’’. 
(q) AMENDMENTS RELATED TO SECTION 422 OF 
THE ACT.— 
(1) Subparagraph (B) of section 965(a)(2) is 
amended by inserting ‘‘from another controlled for-
eign corporation in such chain of ownership’’ before 
‘‘, but only to the extent’’. 
(2) Subparagraph (A) of section 965(b)(2) is 
amended by inserting ‘‘cash’’ before ‘‘dividends’’. 
(3) Paragraph (3) of section 965(b) is amended 
by adding at the end the following: ‘‘The Secretary 
may prescribe such regulations as may be necessary 
or appropriate to prevent the avoidance of the pur-
poses of this paragraph, including regulations which 
provide that cash dividends shall not be taken into 
account under subsection (a) to the extent such divi-
dends are attributable to the direct or indirect trans-
fer (including through the use of intervening entities 
or capital contributions) of cash or other property 
from a related person (as so defined) to a controlled 
foreign corporation.’’. 
(4) Paragraph (1) of section 965(c) is amended 
to read as follows:
‘‘(1) APPLICABLE
FINANCIAL
STATEMENT.— 
The term ‘applicable financial statement’ means— 
‘‘(A) with respect to a United States 
shareholder which is required to file a financial 
statement with the Securities and Exchange 
Commission (or which is included in such a 
statement so filed by another person), the most 
recent audited annual financial statement (in-
cluding the notes which form an integral part 
of such statement) of such shareholder (or 
which includes such shareholder)— 
‘‘(i) which was so filed on or before 
June 30, 2003, and 
‘‘(ii) which was certified on or before 
June 30, 2003, as being prepared in ac-
cordance with generally accepted account-
ing principles, and 
‘‘(B) with respect to any other United 
States shareholder, the most recent audited fi-
nancial statement (including the notes which 
form an integral part of such statement) of 
such shareholder (or which includes such share-
holder)— 
‘‘(i) which was certified on or before 
June 30, 2003, as being prepared in ac-
cordance with generally accepted account-
ing principles, and 
‘‘(ii) which is used for the purposes of 
a statement or report— 
‘‘(I) to creditors, 
‘‘(II) to shareholders, or 
‘‘(III) for any other substantial 
nontax purpose.’’. 
(5) Paragraph (2) of section 965(d) is amended 
by striking ‘‘properly allocated and apportioned’’ and 
inserting ‘‘directly allocable’’. 
(6) Subsection (d) of section 965 is amended by 
adding at the end the following new paragraph: 
‘‘(4) COORDINATION WITH SECTION 78.—Sec-
tion 78 shall not apply to any tax which is not allow-
able as a credit under section 901 by reason of this 
subsection.’’. 
(7) The last sentence of section 965(e)(1) is 
amended by inserting ‘‘which are imposed by foreign 
countries and possessions of the United States and 
are’’ after ‘‘taxes’’. 
(8) Subsection (f) of section 965 is amended by 
inserting ‘‘on or’’ before ‘‘before the due date’’. 
(r) AMENDMENTS RELATED TO SECTION 501 OF 
THE ACT.—
(1) Subparagraph (A) of section 164(b)(5) is 
amended to read as follows: 
‘‘(A) ELECTION TO DEDUCT STATE AND 
LOCAL SALES TAXES IN LIEU OF STATE AND 
LOCAL INCOME TAXES.—At the election of the 
taxpayer for the taxable year, subsection (a) 
shall be applied— 
‘‘(i) without regard to the reference to 
State and local income taxes, and 
‘‘(ii) as if State and local general sales 
taxes were referred to in a paragraph 
thereof.’’. 
(2) Clause (ii) of section 56(b)(1)(A) is amend-
ed 
by 
inserting 
‘‘or 
clause 
(ii) 
of 
section 
164(b)(5)(A)’’ before the period at the end. 
(s) AMENDMENTS RELATED TO SECTION 708 OF 
THE ACT.—Section 708 of the American Jobs Creation 
Act of 2004 is amended— 
(1) in subsection (a), by striking ‘‘contract com-
mencement date’’ and inserting ‘‘construction com-
mencement date’’, and 
(2) by redesignating subsection (d) as sub-
section (e) and inserting after subsection (c) the fol-
lowing new subsection:
‘‘(d) CERTAIN ADJUSTMENTS NOT TO APPLY.—Sec-
tion 481 of the Internal Revenue Code of 1986 shall not 
apply with respect to any change in the method of ac-
counting which is required by this section.’’. 
(t) AMENDMENTS RELATED TO SECTION 710 OF THE 
ACT.— 
(1) Clause (ii) of section 45(b)(4)(B) is amend-
ed by striking ‘‘the date of the enactment of this 
Act’’ and inserting ‘‘January 1, 2005,’’. 
(2) Clause (ii) of section 45(c)(3)(A) is amend-
ed by inserting ‘‘or any nonhazardous lignin waste 
material’’ after ‘‘cellulosic waste material’’. 
(3) Subsection (e) of section 45 is amended by 
striking paragraph (6). 
(4)(A) Paragraph (9) of section 45(e) is amend-
ed to read as follows: 
‘‘(9) COORDINATION
WITH
CREDIT
FOR
PRO-
DUCING
FUEL
FROM
A
NONCONVENTIONAL 
SOURCE.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
facility’ shall not include any facility which pro-
duces electricity from gas derived from the bio-
degradation of municipal solid waste if such 
biodegradation occurred in a facility (within the 
meaning of section 29) the production from
which is allowed as a credit under section 29 
for the taxable year or any prior taxable year. 
‘‘(B) REFINED
COAL
FACILITIES.—The 
term ‘refined coal production facility’ shall not 
include any facility the production from which 
is allowed as a credit under section 29 for the 
taxable year or any prior taxable year.’’. 
(B) Subparagraph (C) of section 45(e)(8) is 
amended by striking ‘‘and (9)’’. 
(5) Subclause (I) of section 168(e)(3)(B)(vi) is 
amended to read as follows: 
‘‘(I) is described in subparagraph 
(A) of section 48(a)(3) (or would be 
so described if ‘solar and wind’ were 
substituted for ‘solar’ in clause (i) 
thereof and the last sentence of such 
section did not apply to such subpara-
graph),’’. 
(6) Paragraph (4) of section 710(g) of the 
American Jobs Creation Act of 2004 is amended by 
striking ‘‘January 1, 2004’’ and inserting ‘‘January 
1, 2005’’. 
(u) AMENDMENT RELATED TO SECTION 801 OF THE 
ACT.—Paragraph (3) of section 7874(a) is amended to 
read as follows:
‘‘(3) COORDINATION WITH SUBSECTION (b).—A 
corporation which is treated as a domestic corpora-
tion under subsection (b) shall not be treated as a 
surrogate foreign corporation for purposes of para-
graph (2)(A).’’. 
(v) AMENDMENTS RELATED TO SECTION 804 OF 
THE ACT.— 
(1) Subparagraph (C) of section 877(g)(2) is 
amended by striking ‘‘section 7701(b)(3)(D)(ii)’’ and 
inserting ‘‘section 7701(b)(3)(D)’’. 
(2) Subsection (n) of section 7701 is amended 
to read as follows: 
‘‘(n) SPECIAL RULES FOR DETERMINING WHEN AN 
INDIVIDUAL IS NO LONGER A UNITED STATES CITIZEN 
OR LONG-TERM RESIDENT.—For purposes of this chap-
ter— 
‘‘(1) UNITED STATES CITIZENS.—An individual 
who would (but for this paragraph) cease to be 
treated as a citizen of the United States shall con-
tinue to be treated as a citizen of the United States 
until such individual— 
‘‘(A) gives notice of an expatriating act 
(with the requisite intent to relinquish citizen-
ship) to the Secretary of State, and
‘‘(B) provides a statement in accordance 
with section 6039G (if such a statement is oth-
erwise required). 
‘‘(2) LONG-TERM
RESIDENTS.—A long-term 
resident (as defined in section 877(e)(2)) who would 
(but for this paragraph) be described in section 
877(e)(1) shall be treated as a lawful permanent 
resident of the United States and as not described 
in section 877(e)(1) until such individual— 
‘‘(A) gives notice of termination of resi-
dency (with the requisite intent to terminate 
residency) to the Secretary of Homeland Secu-
rity, and 
‘‘(B) provides a statement in accordance 
with section 6039G (if such a statement is oth-
erwise required).’’. 
(w) AMENDMENT RELATED TO SECTION 811 OF THE 
ACT.—Subsection (c) of section 811 of the American Jobs 
Creation Act of 2004 is amended by inserting ‘‘and which 
were not filed before such date’’ before the period at the 
end. 
(x) AMENDMENTS RELATED TO SECTION 812 OF 
THE ACT.— 
(1) Subsection (b) of section 6662 is amended 
by adding at the end the following new sentence:
‘‘Except as provided in paragraph (1) or (2)(B) of 
section 6662A(e), this section shall not apply to the 
portion of any underpayment which is attributable to 
a reportable transaction understatement on which a 
penalty is imposed under section 6662A.’’ 
(2) Paragraph (2) of section 6662A(e) is 
amended to read as follows: 
‘‘(2) 
COORDINATION
WITH
OTHER
PEN-
ALTIES.— 
‘‘(A) COORDINATION
WITH
FRAUD
PEN-
ALTY.—This section shall not apply to any por-
tion of an understatement on which a penalty 
is imposed under section 6663. 
‘‘(B) COORDINATION
WITH
GROSS
VALU-
ATION MISSTATEMENT PENALTY.—This section 
shall not apply to any portion of an understate-
ment on which a penalty is imposed under sec-
tion 6662 if the rate of the penalty is deter-
mined under section 6662(h).’’. 
(3) Subsection (f) of section 812 of the Amer-
ican Jobs Creation Act of 2004 is amended to read 
as follows: 
‘‘(f) EFFECTIVE DATES.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to taxable years ending after the date of 
the enactment of this Act. 
‘‘(2) 
DISQUALIFIED
OPINIONS.—Section 
6664(d)(3)(B) of the Internal Revenue Code of 1986 
(as added by subsection (c)) shall not apply to the 
opinion of a tax advisor if— 
‘‘(A) the opinion was provided to the tax-
payer before the date of the enactment of this 
Act, 
‘‘(B) the opinion relates to one or more 
transactions all of which were entered into be-
fore such date, and 
‘‘(C) the tax treatment of items relating to 
each such transaction was included on a return 
or statement filed by the taxpayer before such 
date.’’. 
(y) AMENDMENT RELATED TO SECTION 814 OF THE 
ACT.—Subparagraph (B) of section 6501(a)(10) is 
amended by striking ‘‘(as defined in section 6111)’’. 
(z) AMENDMENT RELATED TO SECTION 815 OF THE 
ACT.—Paragraph (1) of section 6112(b) is amended ‘‘(or 
was required to maintain a list under subsection (a) as 
in effect before the enactment of the American Jobs Cre-
ation Act of 2004)’’ after ‘‘a list under subsection (a)’’.
(aa) AMENDMENTS RELATED TO SECTION 832 OF 
THE ACT.— 
(1) Subsection (e) of section 853 is amended to 
read as follows: 
‘‘(e) TREATMENT OF CERTAIN TAXES NOT ALLOWED 
AS A CREDIT UNDER SECTION 901.—This section shall 
not apply to any tax with respect to which the regulated 
investment company is not allowed a credit under section 
901 by reason of subsection (k) or (l) of such section.’’. 
(2) Clause (i) of section 901(l)(2)(C) is amend-
ed by striking ‘‘if such security were stock’’. 
(bb) AMENDMENTS RELATED TO SECTION 833 OF 
THE ACT.— 
(1) Subsection (a) of section 734 is amended by 
inserting ‘‘with respect to such distribution’’ before 
the period at the end. 
(2) So much of subsection (b) of section 734 as 
precedes paragraph (1) is amended to read as fol-
lows: 
‘‘(b) METHOD OF ADJUSTMENT.—In the case of a 
distribution of property to a partner by a partnership with 
respect to which the election provided in section 754 is 
in effect or with respect to which there is a substantial 
basis reduction, the partnership shall—’’.
(cc) AMENDMENT RELATED TO SECTION 835 OF THE 
ACT.—Paragraph (3) of section 860G(a) is amended— 
(1) in subparagraph (A)(iii)(I), by striking ‘‘the 
obligation’’ and inserting ‘‘a reverse mortgage loan 
or other obligation’’, and 
(2) by striking all that follows subparagraph 
(C) and inserting the following: 
‘‘For purposes of subparagraph (A), any obligation 
secured by stock held by a person as a tenant-stock-
holder (as defined in section 216) in a cooperative 
housing corporation (as so defined) shall be treated 
as secured by an interest in real property. For pur-
poses of subparagraph (A), any obligation originated 
by the United States or any State (or any political 
subdivision, agency, or instrumentality of the United 
States or any State) shall be treated as principally 
secured by an interest in real property if more than 
50 percent of such obligations which are transferred 
to, or purchased by, the REMIC are principally se-
cured by an interest in real property (determined 
without regard to this sentence).’’. 
(dd) AMENDMENTS RELATED TO SECTION 836 OF 
THE ACT.— 
(1) Paragraph (1) of section 334(b) is amended 
by striking ‘‘except that’’ and all that follows and in-