tioned upon the future performance of substantial 
services by any individual. 
‘‘(4) COMPREHENSIVE FOREIGN INCOME TAX.— 
The term ‘comprehensive foreign income tax’ means, 
with respect to any foreign person, the income tax 
of a foreign country if— 
‘‘(A) such person is eligible for the benefits 
of a comprehensive income tax treaty between 
such foreign country and the United States, or 
‘‘(B) such person demonstrates to the sat-
isfaction of the Secretary that such foreign 
country has a comprehensive income tax. 
Such term shall not include any tax unless such tax 
includes rules for the deductibility of deferred com-
pensation which are similar to the rules of this title. 
‘‘(5) NONQUALIFIED
DEFERRED
COMPENSA-
TION PLAN.—The term ‘nonqualified deferred com-
pensation plan’ has the meaning given such term 
under section 409A(d), except that such term shall 
include any plan that provides a right to compensa-
tion based on the appreciation in value of a specified 
number of equity units of the service recipient. 
‘‘(6) APPLICATION OF RULES.—Rules similar to 
the rules of paragraphs (5) and (6) of section 
409A(d) shall apply. 
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‘‘(e) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary or appropriate to 
carry out the purposes of this section, including regula-
tions disregarding a substantial risk of forfeiture in cases 
where necessary to carry out the purposes of this sec-
tion.’’. 
(b) CONFORMING AMENDMENT.—Section 26(b)(2) is 
amended by striking ‘‘and’’ at the end of subparagraph 
(S), by striking the period at the end of subparagraph (T) 
and inserting ‘‘, and’’, and by adding at the end the fol-
lowing new subparagraph: 
‘‘(U) section 457A(c)(1)(B) (relating to as-
certainability of amounts of compensation).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
of subpart B of part II of subchapter E of chapter 1 is 
amended by inserting after the item relating to section 
457 the following new item: 
‘‘Sec. 457A. Nonqualified deferred compensation for investment services.’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2007. 
(2) TREATMENT AS CHANGE IN METHOD OF AC-
COUNTING.—For purposes of section 481 of the In-
ternal Revenue Code of 1986— 
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(A) the amendments made by this section 
shall be treated as a change in method of ac-
counting which is initiated by the taxpayer and 
made with the consent of the Secretary of the 
Treasury, and 
(B) the period for taking into account the 
adjustments under such section by reason of 
such change shall be 4 years. 
SEC. 1203. INDEBTEDNESS INCURRED BY A PARTNERSHIP 
IN ACQUIRING SECURITIES AND COMMOD-
ITIES NOT TREATED AS ACQUISITION IN-
DEBTEDNESS FOR ORGANIZATIONS WHICH 
ARE PARTNERS WITH LIMITED LIABILITY. 
(a) IN GENERAL.—Subsection (c) of section 514 (re-
lating to acquisition indebtedness) is amended by adding 
at the end the following new paragraph: 
‘‘(10) SECURITIES
AND
COMMODITIES
AC-
QUIRED BY PARTNERSHIPS IN WHICH AN ORGANIZA-
TION IS A PARTNER WITH LIMITED LIABILITY.— 
‘‘(A) IN GENERAL.—In the case of any or-
ganization which is a partner with limited liabil-
ity in a partnership, the term ‘acquisition in-
debtedness’ does not, for purposes of this sec-
tion, include indebtedness incurred or continued 
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by such partnership in purchasing or carrying 
any qualified security or commodity. 
‘‘(B) QUALIFIED
SECURITY
OR
COM-
MODITY.—For purposes of this paragraph, the 
term ‘qualified security or commodity’ means 
any security (as defined in section 475(c)(2) 
without regard to the last sentence thereof), 
any 
commodity 
(as 
defined 
in 
section 
475(e)(2)), or any option or derivative contract 
with respect to such a security or commodity. 
‘‘(C) APPLICATION TO TIERED PARTNER-
SHIPS
AND
OTHER
PASS-THRU
ENTITIES.— 
Rules similar to the rules of subparagraph (A) 
shall apply in the case of tiered partnerships 
and other pass-thru entities. 
‘‘(D) REGULATIONS.—The Secretary may 
prescribe such regulations as may be necessary 
or appropriate to carry out the purposes of this 
paragraph, including regulations to prevent the 
abuse of this paragraph.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
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SEC. 1204. APPLICATION TO PARTNERSHIP INTERESTS AND 
TAX SHARING AGREEMENTS OF RULE TREAT-
ING CERTAIN GAIN ON SALES BETWEEN RE-
LATED PERSONS AS ORDINARY INCOME. 
(a) PARTNERSHIP INTERESTS.—Subsection (a) of 
section 1239 is amended to read as follows: 
‘‘(a) TREATMENT OF GAIN AS ORDINARY INCOME.— 
In the case of a sale or exchange of property, directly or 
indirectly, between related persons, any gain recognized to 
the transferor shall be treated as ordinary income if— 
‘‘(1) such property is, in the hands of the trans-
feree, of a character which is subject to the allow-
ance for depreciation provided in section 167, or 
‘‘(2) such property is an interest in a partner-
ship, but only to the extent of gain attributable to 
unrealized appreciation in property which is of a 
character subject to the allowance for depreciation 
provided in section 167.’’. 
(b) TAX SHARING AGREEMENTS.—Section 1239 (re-
lating to gain from sale of depreciable property between 
certain related taxpayers) is amended by adding at the 
end the following new subsection: 
‘‘(f) APPLICATION
TO
TAX
SHARING
AGREE-
MENTS.— 
‘‘(1) IN GENERAL.—If there is a tax sharing 
agreement with respect to any sale or exchange, the 
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transferee and the transferor shall be treated as re-
lated persons for purposes of this section. 
‘‘(2) TAX SHARING AGREEMENT.—For purposes 
of this subsection, the term ‘tax sharing agreement’ 
means any agreement which provides for the pay-
ment to the transferor of any amount which is deter-
mined by reference to any portion of the tax benefit 
realized by the transferee with respect to the depre-
ciation (or amortization) of the property trans-
ferred.’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to sales and exchanges after the 
date of the enactment of this Act. 
PART 2—SELF-EMPLOYMENT TAX TREATMENT 
OF CERTAIN INTEREST HOLDERS IN SERV-
ICE PROVIDING ENTITIES 
SEC. 1211. CERTAIN SERVICE PROVIDING S CORPORATION 
SHAREHOLDERS AND PARTNERS SUBJECT TO 
SELF-EMPLOYMENT TAXES. 
(a) IN GENERAL.—Section 1402 is amended by add-
ing at the end the following new subsection: 
‘‘(l) SPECIAL RULES FOR SERVICE PROVIDING S 
CORPORATION SHAREHOLDERS AND PARTNERS.— 
‘‘(1) S CORPORATION SHAREHOLDERS.—In the 
case of any S corporation which is engaged in a 
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trade or business consisting primarily of the per-
formance of services, any shareholder of such S cor-
poration who provides substantial services with re-
spect to such trade or business shall take into ac-
count such shareholder’s pro rata share of all items 
of income or loss described in section 1366 which 
are attributable to such trade or business in deter-
mining the shareholder’s net earnings from self-em-
ployment. 
‘‘(2) PARTNERS.—In the case of any partner-
ship which is engaged in a trade or business con-
sisting primarily of the performance of services, sub-
section (a)(13) shall not apply to any partner who 
provides substantial services with respect to such 
trade or business. 
‘‘(3) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary or ap-
propriate to carry out the purposes of this sub-
section, including regulations which prevent the 
avoidance of the purposes of this subsection through 
tiered entities or otherwise. 
‘‘(4) CROSS REFERENCE.—For employment tax 
treatment of wages paid to shareholders of S cor-
porations, see subtitle C.’’. 
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(b) CONFORMING AMENDMENT.—Section 211 of the 
Social Security Act is amended by adding at the end the 
following new subsection: 
‘‘(k) SPECIAL RULES FOR SERVICE PROVIDING S 
CORPORATION SHAREHOLDERS AND PARTNERS.— 
‘‘(1) S CORPORATION SHAREHOLDERS.—In the 
case of any S corporation which is engaged in a 
trade or business consisting primarily of the per-
formance of services, any shareholder of such S cor-
poration who provides substantial services with re-
spect to such trade or business shall take into ac-
count such shareholder’s pro rata share of all items 
of income and loss described in section 1366 of the 
Internal Revenue Code of 1986 which are attrib-
utable to such trade or business in determining the 
shareholder’s net earnings from self-employment. 
‘‘(2) PARTNERS.—In the case of any partner-
ship which is engaged in a trade or business con-
sisting primarily of the performance of services, sub-
section (a)(12) shall not apply to any partner who 
provides substantial services with respect to such 
trade or business.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
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PART 3—BROKER REPORTING OF CUSTOMER’S 
BASIS IN SECURITIES TRANSACTIONS 
SEC. 1221. BROKER REPORTING OF CUSTOMER’S BASIS IN 
SECURITIES TRANSACTIONS. 
(a) IN GENERAL.— 
(1) BROKER
REPORTING
FOR
SECURITIES 
TRANSACTIONS.—Section 6045 (relating to returns 
of brokers) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(g) ADDITIONAL INFORMATION REQUIRED IN THE 
CASE OF SECURITIES TRANSACTIONS.— 
‘‘(1) IN GENERAL.—If a broker is otherwise re-
quired to make a return under subsection (a) with 
respect to the gross proceeds of the sale of a covered 
security, the broker shall include in such return the 
information described in paragraph (2). 
‘‘(2) ADDITIONAL INFORMATION REQUIRED.— 
‘‘(A) IN GENERAL.—The information re-
quired under paragraph (1) to be shown on a 
return with respect to a covered security of a 
customer shall include the customer’s adjusted 
basis in such security and whether any gain or 
loss with respect to such security is long-term 
or short-term (within the meaning of section 
1222). 
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‘‘(B) 
DETERMINATION
OF
ADJUSTED 
BASIS.—For purposes of subparagraph (A)— 
‘‘(i) IN
GENERAL.—The customer’s 
adjusted basis shall be determined— 
‘‘(I) in the case of any stock 
(other than any stock in an open-end 
fund), in accordance with the first-in 
first-out method unless the customer 
notifies the broker by means of mak-
ing an adequate identification of the 
stock sold or transferred, 
‘‘(II) in the case of any interest 
in an open-end fund acquired before 
January 1, 2011, in accordance with 
any acceptable method under section 
1012 with respect to the account in 
which such interest is held, 
‘‘(III) in the case of any interest 
in an open-end fund acquired after 
December 31, 2010, in accordance 
with the broker’s default method un-
less the customer notifies the broker 
that he elects another acceptable 
method under section 1012 with re-
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spect to the account in which such in-
terest is held, and 
‘‘(IV) in any other case, under 
the method for making such deter-
mination under section 1012. 
‘‘(ii) EXCEPTION FOR WASH SALES.— 
Except as otherwise provided by the Sec-
retary, the customer’s adjusted basis shall 
be determined without regard to section 
1091 (relating to loss from wash sales of 
stock or securities) unless the transactions 
occur in the same account with respect to 
identical securities. 
‘‘(3) COVERED
SECURITY.—For purposes of 
this subsection— 
‘‘(A) IN GENERAL.—The term ‘covered se-
curity’ means any specified security acquired on 
or after the applicable date if such security— 
‘‘(i) was acquired through a trans-
action in the account in which such secu-
rity is held, or 
‘‘(ii) was transferred to such account 
from an account in which such security 
was a covered security, but only if the 
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broker received a statement under section 
6045A with respect to the transfer. 
‘‘(B) SPECIFIED
SECURITY.—The term 
‘specified security’ means— 
‘‘(i) any share of stock in a corpora-
tion, 
‘‘(ii) any note, bond, debenture, or 
other evidence of indebtedness, 
‘‘(iii) any commodity, or contract or 
derivative with respect to such commodity, 
if the Secretary determines that adjusted 
basis reporting is appropriate for purposes 
of this subsection, and 
‘‘(iv) any other financial instrument 
with respect to which the Secretary deter-
mines that adjusted basis reporting is ap-
propriate for purposes of this subsection. 
‘‘(C) APPLICABLE DATE.—The term ‘appli-
cable date’ means— 
‘‘(i) January 1, 2009, in the case of 
any specified security which is stock in a 
corporation, and 
‘‘(ii) January 1, 2011, or such later 
date determined by the Secretary in the 
case of any other specified security. 
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‘‘(4) OPEN-END FUND.—For purposes of this 
subsection, the term ‘open-end fund’ means a regu-
lated investment company (as defined in section 
851) which is offering for sale or has outstanding 
any redeemable security of which it is the issuer and 
the shares of which are not traded on an established 
securities exchange. 
‘‘(5) TREATMENT
OF
S
CORPORATIONS.—For 
purposes of this section, a S corporation (other than 
a financial institution) shall be treated in the same 
manner as a partnership.’’. 
(2) BROKER INFORMATION REQUIRED WITH RE-
SPECT
TO
PUBLICLY
TRADED
OPTIONS.—Section 
6045, as amended by subsection (a), is amended by 
adding at the end the following new subsection: 
‘‘(h) APPLICATION TO OPTIONS ON COVERED SECU-
RITIES.— 
‘‘(1) EXERCISE OF OPTION.—For purposes of 
this section, in the case of any exercise of an option 
on a covered security where the taxpayer is the 
grantor of the option and the option was acquired in 
the same account as the covered security, the 
amount received for the grant of an option on a cov-
ered security shall be treated as an adjustment to 
gross proceeds or as an adjustment to basis, as the 
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case may be. A similar rule shall apply in the case 
of the exercise of an option where the taxpayer is 
not the grantor of the option. 
‘‘(2) LAPSE OR CLOSING TRANSACTION.—For 
purposes of this section, in the case of the lapse (or 
closing 
transaction 
(as 
defined 
in 
section 
1234(b)(2)(A))) of an option on a covered security 
where the taxpayer is the grantor of the option, this 
section shall apply as if the premium received for 
such option were gross proceeds received on the date 
of the lapse or closing transaction, and the cost (if 
any) of the closing transaction shall be taken into 
account as adjusted basis. A similar rule shall apply 
in the case of a lapse or closing transaction where 
the taxpayer is not the grantor of the option. 
‘‘(3) 
APPLICATION
LIMITED
TO
OPTIONS 
GRANTED ON OR AFTER APPLICABLE DATE.—Para-
graphs (1) and (2) shall not apply to any option on 
a covered security which is granted or acquired be-
fore the applicable date with respect to such covered 
security. 
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the terms ‘covered security’ and ‘applicable 
date’ shall have the meaning given such terms in 
subsection (g)(3).’’. 
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(3) EXTENSION OF PERIOD FOR STATEMENTS 
SENT TO CUSTOMERS.— 
(A) IN GENERAL.—Subsection (b) of sec-
tion 6045 is amended by striking ‘‘January 31’’ 
and inserting ‘‘February 15’’. 
(B) STATEMENTS
RELATED
TO
SUB-
STITUTE PAYMENTS.—Subsection (d) of section 
6045 is amended— 
(i) by striking ‘‘at such time and’’, 
and 
(ii) by inserting after ‘‘other item.’’ 
the following new sentence: ‘‘The written 
statement required under the preceding 
sentence shall be furnished on or before 
February 15 of the year following the cal-
endar year during which such payment was 
made.’’. 
(C) OTHER STATEMENTS.—Subsection (b) 
of section 6045 is amended by adding at the 
end the following: ‘‘In the case that a substan-
tial portion of the assets in the account of a 
customer gives rise to the requirement to fur-
nish a statement under this subsection, section 
6042(c), 6049(c)(2)(A), or 6050N(b), any 
statement otherwise required to be furnished to 
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the customer with respect to any item in such 
account on or before January 31 shall instead 
be required to be furnished to such customer on 
or before February 15.’’. 
(b) DETERMINATION OF BASIS OF CERTAIN SECURI-
TIES ON ACCOUNT BY ACCOUNT METHOD.—Section 1012 
(relating to basis of property–cost) is amended— 
(1) by striking ‘‘The basis of property’’ and in-
serting the following: 
‘‘(a) IN GENERAL.—The basis of property’’, 
(2) by striking ‘‘The cost of real property’’ and 
inserting the following: 
‘‘(b) SPECIAL RULE FOR APPORTIONED REAL ES-
TATE TAXES.—The cost of real property’’, and 
(3) by adding at the end the following new sub-
section: 
‘‘(c) DETERMINATIONS BY ACCOUNT.— 
‘‘(1) IN GENERAL.—In the case of the sale, ex-
change, or other disposition of a specified security 
on or after the applicable date, the conventions pre-
scribed by regulations under this section shall be ap-
plied on an account by account basis. 
‘‘(2) APPLICATION TO OPEN-END FUNDS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), any stock in an open-end 
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fund acquired before January 1, 2009, shall be 
treated as a separate account from any such 
stock acquired on or after such date. 
‘‘(B) ELECTION BY OPEN-END FUND FOR 
TREATMENT AS SINGLE ACCOUNT.—If an open- 
end fund elects (at such time and in such form 
and manner as the Secretary may prescribe) to 
have this subparagraph apply with respect to 
one or more of its stockholders— 
‘‘(i) subparagraph (A) shall not apply 
with respect to any stock in such fund held 
by such stockholders, and 
‘‘(ii) all stock in such fund which is 
held by such stockholders shall be treated 
as covered securities described in section 
6045(g)(3) without regard to the date of 
the acquisition of such stock. 
‘‘(3) DEFINITIONS.—For purposes of this sec-
tion, the terms ‘specified security’, ‘applicable date’, 
and ‘open-end fund’ shall have the meaning given 
such terms in section 6045(g).’’. 
(c) INFORMATION BY TRANSFERORS TO AID BRO-
KERS.— 
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(1) IN GENERAL.—Subpart B of part III of 
subchapter A of chapter 61 is amended by inserting 
after section 6045 the following new section: 
‘‘SEC. 6045A. INFORMATION REQUIRED IN CONNECTION 
WITH TRANSFERS OF COVERED SECURITIES 
TO BROKERS. 
‘‘(a) FURNISHING OF INFORMATION.—Every applica-
ble person which transfers to a broker (as defined in sec-
tion 6045(c)(1)) a security which is a covered security (as 
defined in section 6045(g)(3)) in the hands of such appli-
cable person shall furnish to such broker a written state-
ment in such manner and setting forth such information 
as the Secretary may by regulations prescribe for purposes 
of enabling such broker to meet the requirements of sec-
tion 6045(g). 
‘‘(b) APPLICABLE PERSON.—For purposes of sub-
section (a), the term ‘applicable person’ means— 
‘‘(1) any broker (as defined in section 
6045(c)(1)), and 
‘‘(2) any other person as provided by the Sec-
retary in regulations. 
‘‘(c) TIME
FOR
FURNISHING
STATEMENT.—Any 
statement required by subsection (a) shall be furnished 
not later than the earlier of— 
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‘‘(B) such fund is funded in a manner that 
such fund will not exceed the amount necessary 
to repay the issue if invested at the maximum 
rate permitted under subparagraph (C), and 
‘‘(C) the yield on such fund is not greater 
than the discount rate determined under sub-
section (d)(3) with respect to the issue.’’. 
(2) APPLICATION OF AVAILABLE PROJECT PRO-
CEEDS
TO
OTHER
REQUIREMENTS.—Subsections 
(d)(1)(A), (d)(2)(A), (f)(1)(A), (f)(1)(B), (f)(1)(C), 
and (f)(3) of section 1397E are each amended by 
striking ‘‘proceeds’’ and inserting ‘‘available project 
proceeds’’ 
(3) 
AVAILABLE
PROJECT
PROCEEDS
DE-
FINED.—Subsection (i) of section 1397E (relating to 
definitions) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) AVAILABLE
PROJECT
PROCEEDS.—The 
term ‘available project proceeds’ means— 
‘‘(A) the excess of— 
‘‘(i) the proceeds from the sale of an 
issue, over 
‘‘(ii) the issuance costs financed by 
the issue (to the extent that such costs do 
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not exceed 2 percent of such proceeds), 
and 
‘‘(B) the proceeds from any investment of 
the excess described in subparagraph (A).’’. 
(c) EFFECTIVE DATE.— 
(1) EXTENSION.—The amendment made by 
subsection (a) shall apply to obligations issued after 
December 31, 2007. 
(2) MODIFICATION
OF
ARBITRAGE
RULES.— 
The amendments made by subsection (b) shall apply 
to obligations issued after the date of the enactment 
of this Act. 
SEC. 2016. TAX INCENTIVES FOR INVESTMENT IN THE DIS-
TRICT OF COLUMBIA. 
(a) DESIGNATION OF ZONE.— 
(1) IN
GENERAL.—Subsection (f) of section 
1400 is amended by striking ‘‘2007’’ both places it 
appears and inserting ‘‘2008’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to periods beginning 
after December 31, 2007. 
(b) 
TAX-EXEMPT
ECONOMIC
DEVELOPMENT 
BONDS.— 
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(1) IN
GENERAL.—Subsection (b) of section 
1400A is amended by striking ‘‘2007’’ and inserting 
‘‘2008’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to bonds issued after 
December 31, 2007. 
(c) ZERO PERCENT CAPITAL GAINS RATE.— 
(1) IN
GENERAL.—Subsection (b) of section 
1400B is amended by striking ‘‘2008’’ each place it 
appears and inserting ‘‘2009’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 1400B(e)(2) is amended— 
(i) by striking ‘‘2012’’ and inserting 
‘‘2013’’, and 
(ii) by striking ‘‘2012’’ in the heading 
thereof and inserting ‘‘2013’’. 
(B) Section 1400B(g)(2) is amended by 
striking ‘‘2012’’ and inserting ‘‘2013’’. 
(C) Section 1400F(d) is amended by strik-
ing ‘‘2012’’ and inserting ‘‘2013’’. 
(3) EFFECTIVE DATES.— 
(A) EXTENSION.—The amendments made 
by paragraph (1) shall apply to acquisitions 
after December 31, 2007. 
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(B) 
CONFORMING
AMENDMENTS.—The 
amendments made by paragraph (2) shall take 
effect on the date of the enactment of this Act. 
(d) FIRST-TIME HOMEBUYER CREDIT.— 
(1) IN
GENERAL.—Subsection (i) of section 
1400C is amended by striking ‘‘2008’’ and inserting 
‘‘2009’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to property purchased 
after December 31, 2007. 
SEC. 2017. DISCLOSURE FOR COMBINED EMPLOYMENT TAX 
REPORTING. 
(a) IN GENERAL.—Subparagraph (B) of section 
6103(d)(5) (relating to termination) is amended by strik-
ing ‘‘December 31, 2007’’ and inserting ‘‘December 31, 
2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to disclosures after December 31, 
2007. 
SEC. 2018. DISCLOSURE OF RETURN INFORMATION TO AP-
PRISE APPROPRIATE OFFICIALS OF TER-
RORIST ACTIVITIES. 
(a) 
IN
GENERAL.—Clause 
(iv) 
of 
section 
6103(i)(3)(C) (relating to termination) is amended by 
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striking ‘‘December 31, 2007’’ and inserting ‘‘December 
31, 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to disclosures after December 31, 
2007. 
SEC. 2019. DISCLOSURE UPON REQUEST OF INFORMATION 
RELATING TO TERRORIST ACTIVITIES. 
(a) IN GENERAL.—Subparagraph (E) of section 
6103(i)(7) (relating to termination) is amended by strik-
ing ‘‘December 31, 2007’’ and inserting ‘‘December 31, 
2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to disclosures after December 31, 
2007. 
SEC. 2020. DISCLOSURE OF RETURN INFORMATION TO 
CARRY OUT INCOME CONTINGENT REPAY-
MENT OF STUDENT LOANS. 
(a) IN GENERAL.—Subparagraph (D) of section 
6103(l)(13) (relating to termination) is amended by strik-
ing ‘‘December 31, 2007’’ and inserting ‘‘December 31, 
2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to requests made after December 
31, 2007. 
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SEC. 2021. AUTHORITY FOR UNDERCOVER OPERATIONS. 
(a) IN GENERAL.—Paragraph (6) of section 7608(c) 
(relating to application of section) is amended by striking 
‘‘January 1, 2008’’ each place it appears and inserting 
‘‘January 1, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on January 1, 2008. 
SEC. 2022. INCREASE IN LIMIT ON COVER OVER OF RUM EX-
CISE TAX TO PUERTO RICO AND THE VIRGIN 
ISLANDS. 
(a) IN GENERAL.—Paragraph (1) of section 7652(f) 
is amended by striking ‘‘January 1, 2008’’ and inserting 
‘‘January 1, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distilled spirits brought into the 
United States after December 31, 2007. 
SEC. 2023. PARITY IN THE APPLICATION OF CERTAIN LIM-
ITS TO MENTAL HEALTH BENEFITS. 
(a) IN GENERAL.—Paragraph (3) of section 9812(f) 
(relating to application of section) is amended by striking 
‘‘December 31, 2007’’ and inserting ‘‘December 31, 
2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to benefits for services furnished 
after December 31, 2007. 
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SEC. 
2024. 
EXTENSION 
OF 
ECONOMIC 
DEVELOPMENT 
CREDIT FOR AMERICAN SAMOA. 
(a) IN GENERAL.—Subsection (d) of section 119 of 
division A of the Tax Relief and Health Care Act of 2006 
is amended— 
(1) by striking ‘‘first two taxable years’’ and in-
serting ‘‘first 3 taxable years’’, and 
(2) by striking ‘‘January 1, 2008’’ and insert-
ing ‘‘January 1, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 2025. QUALIFIED CONSERVATION CONTRIBUTIONS. 
(a) 
IN
GENERAL.—Clause 
(vi) 
of 
section 
170(b)(1)(E) (relating to termination) is amended by 
striking ‘‘December 31, 2007’’ and inserting ‘‘December 
31, 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made in taxable 
years beginning after December 31, 2007. 
SEC. 2026. ENHANCED CHARITABLE DEDUCTION FOR CON-
TRIBUTIONS OF FOOD INVENTORY. 
(a) 
IN
GENERAL.—Clause 
(iv) 
of 
section 
170(e)(3)(C) (relating to termination) is amended by 
striking ‘‘December 31, 2007’’ and inserting ‘‘December 
31, 2008’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made after De-
cember 31, 2007. 
SEC. 2027. ENHANCED CHARITABLE DEDUCTION FOR CON-
TRIBUTIONS OF BOOK INVENTORY TO PUB-
LIC SCHOOLS. 
(a) 
IN
GENERAL.—Clause 
(iv) 
of 
section 
170(e)(3)(D) (relating to termination) is amended by 
striking ‘‘December 31, 2007’’ and inserting ‘‘December 
31, 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made after De-
cember 31, 2007. 
SEC. 2028. ENHANCED DEDUCTION FOR QUALIFIED COM-
PUTER CONTRIBUTIONS. 
(a) IN GENERAL.—Subparagraph (G) of section 
170(e)(6) (relating to termination) is amended by striking 
‘‘December 31, 2007’’ and inserting ‘‘December 31, 
2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to contributions made during tax-
able years beginning after December 31, 2007. 
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SEC. 2029. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL 
RETIREMENT PLANS FOR CHARITABLE PUR-
POSES. 
(a) IN GENERAL.—Subparagraph (F) of section 
408(d)(8) (relating to termination) is amended by striking 
‘‘December 31, 2007’’ and inserting ‘‘December 31, 
2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions made in taxable 
years beginning after December 31, 2007. 
SEC. 2030. BASIS ADJUSTMENT TO STOCK OF S CORPORA-
TIONS 
MAKING 
CHARITABLE 
CONTRIBU-
TIONS OF PROPERTY. 
(a) IN GENERAL.—The last sentence of section 
1367(a)(2) (relating to decreases in basis) is amended by 
striking ‘‘December 31, 2007’’ and inserting ‘‘December 
31, 2008’’. 
(b) TECHNICAL AMENDMENT RELATED TO SECTION 
1203 OF THE PENSION PROTECTION ACT OF 2006.—Sub-
section (d) of section 1366 is amended by adding at the 
end the following new paragraph: 
‘‘(4) APPLICATION OF LIMITATION ON CHARI-
TABLE CONTRIBUTIONS.—In the case of any chari-
table contribution of property to which the second 
sentence of section 1367(a)(2) applies, paragraph 
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(1) shall not apply to the extent of the excess (if 
any) of— 
‘‘(A) the shareholder’s pro rata share of 
such contribution, over 
‘‘(B) the shareholder’s pro rata share of 
the adjusted basis of such property.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to contributions made in taxable years 
beginning after December 31, 2007. 
(2) TECHNICAL AMENDMENT.—The amendment 
made by subsection (b)shall take effect as if included 
in the provision of the Pension Protection Act of 
2006 to which it relates. 
SEC. 2031. DEDUCTION FOR CERTAIN EXPENSES OF ELE-
MENTARY AND SECONDARY SCHOOL TEACH-
ERS. 
(a) IN GENERAL.—Subparagraph (D) of section 
62(a)(2) (relating to certain expenses of elementary and 
secondary school teachers) is amended by striking ‘‘or 
2007’’ and inserting ‘‘2007, or 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2007. 
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SEC. 2032. ELECTION TO INCLUDE COMBAT PAY AS EARNED 
INCOME FOR PURPOSES OF EARNED INCOME 
TAX CREDIT. 
(a) 
IN
GENERAL.—Subclause 
(II) 
of 
section 
32(c)(2)(B)(vi) (defining earned income) is amended by 
striking ‘‘January 1, 2008’’ and inserting ‘‘January 1, 
2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years ending after De-
cember 31, 2007. 
SEC. 2033. MODIFICATION OF MORTGAGE REVENUE BONDS 
FOR VETERANS. 
(a) QUALIFIED MORTGAGE BONDS USED TO FI-
NANCE RESIDENCES FOR VETERANS WITHOUT REGARD 
TO FIRST-TIME HOMEBUYER REQUIREMENT.—Subpara-
graph (D) of section 143(d)(2) (relating to exceptions) is 
amended by striking ‘‘January 1, 2008’’ and inserting 
‘‘January 1, 2009’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to bonds issued after December 
31, 2007. 
SEC. 2034. DISTRIBUTIONS FROM RETIREMENT PLANS TO 
INDIVIDUALS CALLED TO ACTIVE DUTY. 
(a) IN GENERAL.—Clause (iv) of section 72(t)(2)(G) 
is amended by striking ‘‘December 31, 2007’’ and insert-
ing ‘‘December 31, 2008’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to individuals ordered or called to 
active duty on or after December 31, 2007. 
SEC. 2035. STOCK IN RIC FOR PURPOSES OF DETERMINING 
ESTATES OF NONRESIDENTS NOT CITIZENS. 
(a) IN GENERAL.—Paragraph (3) of section 2105(d) 
(relating to stock in a RIC) is amended by striking ‘‘De-
cember 31, 2007’’ and inserting ‘‘December 31, 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to decedents dying after December 
31, 2007. 
SEC. 2036. QUALIFIED INVESTMENT ENTITIES. 
(a) 
IN
GENERAL.—Clause 
(ii) 
of 
section 
897(h)(4)(A) (relating to termination) is amended by 
striking ‘‘December 31, 2007’’ and inserting ‘‘December 
31, 2008’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on January 1, 2008. 
SEC. 2037. DISCLOSURE OF RETURN INFORMATION FOR 
CERTAIN VETERANS PROGRAMS. 
(a) IN GENERAL.—The last sentence of paragraph 
(7) of section 6103(l) is amended by striking ‘‘September 
30, 2008’’ and inserting ‘‘December 31, 2008’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to requests made after Sep-
tember 30, 2008. 
TITLE III—CORPORATE TAX 
REFORM 
Subtitle A—Corporate Rate 
Reduction 
SEC. 3001. REDUCTION IN TOP CORPORATE MARGINAL 
RATE. 
(a) GENERAL RULE.—Paragraph (1) of section 11(b) 
(relating to amount of tax) is amended— 
(1) by inserting ‘‘and’’ at the end of subpara-
graph (B), 
(2) by striking subparagraphs (C) and (D) and 
inserting the following: 
‘‘(C) 30.5 percent of so much of the tax-
able income as exceeds $75,000.’’, and 
(3) by striking ‘‘$11,750’’ and all that follows 
and inserting ‘‘$9,125.’’. 
(b) PERSONAL
SERVICE
CORPORATIONS.—Para-
graph (2) of section 11(b) is amended by striking ‘‘35 per-
cent’’ and inserting ‘‘30.5 percent’’. 
(c) CONFORMING AMENDMENTS.—Paragraphs (1) 
and (2) of section 1445(e) are each amended by striking 
‘‘35 percent’’ and inserting ‘‘30.5 percent’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2008, except that the amendments made 
by subsection (c) shall take effect on January 1, 2009. 
Subtitle B—Repeal of Deduction 
for Income Attributable to Do-
mestic Production Activities 
SEC. 3101. REPEAL OF DEDUCTION FOR INCOME ATTRIB-
UTABLE TO DOMESTIC PRODUCTION ACTIVI-
TIES. 
(a) IN GENERAL.—Section 199 is repealed. 
(b) CONFORMING AMENDMENTS.— 
(1) 
Sections 
86(b)(2)(A), 
135(c)(4)(A), 
137(b)(3)(A), 
219(g)(3)(A)(ii), 
221(b)(2)(C), 
222(b)(2)(C), 246(b)(1), and 469(i)(3)(F) are each 
amended by striking ‘‘199,’’. 
(2) Clauses (i)(II) and (ii)(II) of section 
56(d)(1)(A) are each amended by striking ‘‘and the 
deduction under section 199’’. 
(3) Clause (i) of section 163(j)(6)(A) is amend-
ed by inserting ‘‘and’’ at the end of subclause (II), 
by striking subclause (III) and by redesignating sub-
clause (IV) as subclause (III). 
(4) Subparagraph (C) of section 170(b)(2) is 
amended by striking clause (iv), by redesignating 
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Subtitle C—Provisions Related to 
Foreign Source Income 
SEC. 3201. ALLOCATION OF EXPENSES AND TAXES ON 
BASIS OF REPATRIATION OF FOREIGN IN-
COME. 
(a) IN GENERAL.—Part III of subchapter N of chap-
ter 1 is amended by inserting after subpart G the following 
new subpart: 
‘‘Subpart H—Special Rules for Allocation of Foreign- 
Related Deductions and Foreign Tax Credits 
‘‘Sec. 975. Deductions allocated to deferred foreign income may not offset 
United States source income. 
‘‘Sec. 976. Amount of foreign taxes computed on overall basis. 
‘‘Sec. 977. Application of subpart. 
‘‘SEC. 975. DEDUCTIONS ALLOCATED TO DEFERRED FOR-
EIGN INCOME MAY NOT OFFSET UNITED 
STATES SOURCE INCOME. 
‘‘(a) CURRENT YEAR DEDUCTIONS.—For purposes 
of this chapter, foreign-related deductions for any taxable 
year— 
‘‘(1) shall be taken into account for such tax-
able year only to the extent that such deductions are 
allocable to currently-taxed foreign income, and 
‘‘(2) to the extent not so allowed, shall be taken 
into account in subsequent taxable years as provided 
in subsection (b). 
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Foreign-related deductions shall be allocated to currently- 
taxed foreign income in the same proportion which cur-
rently-taxed foreign income bears to the sum of currently- 
taxed foreign income and deferred foreign income. 
‘‘(b) DEDUCTIONS RELATED TO REPATRIATED DE-
FERRED FOREIGN INCOME.— 
‘‘(1) IN GENERAL.—If there is repatriated for-
eign income for a taxable year, the portion of the 
previously deferred deductions allocated to the repa-
triated foreign income shall be taken into account 
for the taxable year as a deduction allocated to in-
come from sources outside the United States. Any 
such amount shall not be included in foreign-related 
deductions for purposes of applying subsection (a) to 
such taxable year. 
‘‘(2) PORTION OF PREVIOUSLY DEFERRED DE-
DUCTIONS.—For purposes of paragraph (1), the por-
tion of the previously deferred deductions allocated 
to repatriated foreign income is— 
‘‘(A) the amount which bears the same 
proportion to such deductions, as 
‘‘(B) the repatriated income bears to the 
previously deferred foreign income. 
‘‘(c) DEFINITIONS AND SPECIAL RULE.—For pur-
poses of this section— 
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‘‘(1) FOREIGN-RELATED
DEDUCTIONS.—The 
term ‘foreign-related deductions’ means the total 
amount of deductions and expenses which would be 
allocated or apportioned to gross income from 
sources without the United States for the taxable 
year if both the currently-taxed foreign income and 
deferred foreign income were taken into account. 
‘‘(2) CURRENTLY-TAXED
FOREIGN
INCOME.— 
The term ‘currently-taxed foreign income’ means the 
amount of gross income from sources without the 
United States for the taxable year (determined with-
out regard to repatriated foreign income for such 
year). 
‘‘(3) DEFERRED FOREIGN INCOME.—The term 
‘deferred foreign income’ means the excess of— 
‘‘(A) the amount that would be includible 
in gross income under subpart F of this part 
for the taxable year if— 
‘‘(i) all controlled foreign corporations 
were treated as one controlled foreign cor-
poration, and 
‘‘(ii) all earnings and profits of all 
controlled foreign corporations were sub-
part F income (as defined in section 952), 
over 
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‘‘(B) the sum of— 
‘‘(i) all dividends received during the 
taxable year from controlled foreign cor-
porations, plus 
‘‘(ii) amounts includible in gross in-
come under section 951(a). 
‘‘(4) PREVIOUSLY
DEFERRED
FOREIGN
IN-
COME.—The term ‘previously deferred foreign in-
come’ means the aggregate amount of deferred for-
eign income for all prior taxable years to which this 
part applies, determined as of the beginning of the 
taxable year, reduced by the repatriated foreign in-
come for all such prior taxable years. 
‘‘(5) REPATRIATED
FOREIGN
INCOME.—The 
term ‘repatriated foreign income’ means the amount 
included in gross income on account of distributions 
out of previously deferred foreign income. 
‘‘(6) PREVIOUSLY
DEFERRED
DEDUCTIONS.— 
The term ‘previously deferred deductions’ means the 
aggregate amount of foreign-related deductions not 
taken into account under subsection (a) for all prior 
taxable years (determined as of the beginning of the 
taxable year), reduced by any amounts taken into 
account under subsection (b) for such prior taxable 
years. 
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‘‘(7) 
TREATMENT
OF
CERTAIN
FOREIGN 
TAXES.— 
‘‘(A) PAID BY CONTROLLED FOREIGN COR-
PORATION.—Section 78 shall not apply for pur-
poses of determining currently-taxed foreign in-
come and deferred foreign income. 
‘‘(B) PAID BY TAXPAYER.—For purposes 
of determining currently-taxed foreign income, 
gross income from sources without the United 
States shall be reduced by the aggregate 
amount of taxes described in the applicable 
paragraph of section 901(b) which are paid by 
the taxpayer (without regard to sections 902 
and 960) during the taxable year. 
‘‘(8) COORDINATION
WITH
SECTION
976.—In 
determining currently-taxed foreign income and de-
ferred foreign income, the amount of deemed foreign 
tax credits shall be determined with regard to sec-
tion 976. 
‘‘SEC. 976. AMOUNT OF FOREIGN TAXES COMPUTED ON 
OVERALL BASIS. 
‘‘(a) CURRENT YEAR ALLOWANCE.—For purposes of 
this chapter, the amount taken into account as foreign in-
come taxes for any taxable year shall be an amount which 
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bears the same ratio to the total foreign income taxes for 
that taxable year as— 
‘‘(1) the currently-taxed foreign income for such 
taxable year, bears to 
‘‘(2) the sum of the currently-taxed foreign in-
come and deferred foreign income for such year. 
The portion of the total foreign income taxes for any tax-
able year not taken into account under the preceding sen-
tence for a taxable year shall only be taken into account 
as provided in subsection (b) (and shall not be taken into 
account for purposes of applying sections 902 and 960). 
‘‘(b) ALLOWANCE RELATED TO REPATRIATED DE-
FERRED FOREIGN INCOME.— 
‘‘(1) IN GENERAL.—If there is repatriated for-
eign income for any taxable year, the portion of the 
previously deferred foreign income taxes paid or ac-
crued during such taxable year shall be taken into 
account for the taxable year as foreign taxes paid or 
accrued. Any such taxes so taken into account shall 
not be included in foreign income taxes for purposes 
of applying subsection (a) to such taxable year. 
‘‘(2) PORTION OF PREVIOUSLY DEFERRED FOR-
EIGN INCOME TAXES.—For purposes of paragraph 
(1), the portion of the previously deferred foreign in-
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100 
come taxes allocated to repatriated deferred foreign 
income is— 
‘‘(A) the amount which bears the same 
proportion to such taxes, as 
‘‘(B) the repatriated deferred income bears 
to the previously deferred foreign income. 
‘‘(c) DEFINITIONS AND SPECIAL RULE.—For pur-
poses of this section— 
‘‘(1) PREVIOUSLY DEFERRED FOREIGN INCOME 
TAXES.—The term ‘previously deferred foreign in-
come taxes’ means the aggregate amount of total 
foreign income taxes not taken into account under 
subsection (a) for all prior taxable years (determined 
as of the beginning of the taxable year), reduced by 
any amounts taken into account under subsection 
(b) for such prior taxable years. 
‘‘(2) TOTAL
FOREIGN
INCOME
TAXES.—The 
term ‘total foreign income taxes’ means the sum of 
foreign income taxes paid or accrued during the tax-
able year (determined without regard to section 
904(c)) plus the increase in foreign income taxes 
that would be paid or accrued during the taxable 
year under sections 902 and 960 if— 
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101 
‘‘(A) all controlled foreign corporations 
were treated as one controlled foreign corpora-
tion, and 
‘‘(B) all earnings and profits of all con-
trolled foreign corporations were subpart F in-
come (as defined in section 952). 
‘‘(3) FOREIGN INCOME TAXES.—The term ‘for-
eign income taxes’ means any income, war profits, or 
excess profits taxes paid by the taxpayer to any for-
eign country or possession of the United States. 
‘‘(4) CURRENTLY-TAXED FOREIGN INCOME AND 
DEFERRED
FOREIGN
INCOME.—The terms ‘cur-
rently-taxed foreign income’ and ‘deferred foreign in-
come’ have the meanings given such terms by sec-
tion 975(c)). 
‘‘SEC. 977. APPLICATION OF SUBPART. 
‘‘This subpart— 
‘‘(1) shall be applied before subpart A, and 
‘‘(2) shall be applied separately with respect to 
the categories of income specified in section 
904(d)(1).’’. 
(b) CLERICAL AMENDMENT.—The table of subparts 
for part III of subpart N of chapter 1 is amended by in-
serting after the item relating to subpart G the following 
new item: 
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102 
‘‘SUBPART H. SPECIAL RULES FOR ALLOCATION OF FOREIGN-RELATED 
DEDUCTIONS AND FOREIGN TAX CREDITS.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
SEC. 3202. FOREIGN CURRENCY CONVERSION FOR DETER-
MINATION OF FOREIGN TAXES AND FOREIGN 
CORPORATION’S EARNINGS AND PROFITS. 
(a) EARNINGS AND PROFITS AND DISTRIBUTIONS.— 
Paragraph (2) of section 986(b) is amended to read as 
follows: 
‘‘(2) in the case of any United States person, 
the earnings and profits determined under para-
graph (1) shall (if necessary) be translated into dol-
lars using the average exchange rate for the taxable 
year in which earned.’’. 
(b) PREVIOUSLY TAXED EARNINGS AND PROFITS.— 
Paragraph (1) of section 986(c) is amended by striking 
‘‘movements in exchange rates between the times of 
deemed and actual distribution’’ and inserting ‘‘the dif-
ference between the exchange rate applicable to such earn-
ings and profits under subsection (b)(2) and the exchange 
rate at the time of the actual distribution’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
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SEC. 3203. REPEAL OF WORLDWIDE ALLOCATION OF INTER-
EST. 
(a) IN GENERAL.—Section 864 is amended by strik-
ing subsection (f) and by redesignating subsection (g) as 
subsection (f). 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
SEC. 3204. LIMITATION ON TREATY BENEFITS FOR CERTAIN 
DEDUCTIBLE PAYMENTS. 
(a) IN GENERAL.—Section 894 (relating to income 
affected by treaty) is amended by adding at the end the 
following new subsection: 
‘‘(d) LIMITATION ON TREATY BENEFITS FOR CER-
TAIN DEDUCTIBLE PAYMENTS.— 
‘‘(1) IN GENERAL.—In the case of any deduct-
ible related-party payment, any withholding tax im-
posed under chapter 3 (and any tax imposed under 
subpart A or B of this part) with respect to such 
payment may not be reduced under any treaty of the 
United States unless any such withholding tax would 
be reduced under a treaty of the United States if 
such payment were made directly to the foreign par-
ent corporation. 
‘‘(2) 
DEDUCTIBLE
RELATED-PARTY
PAY-
MENT.—For purposes of this subsection, the term 
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‘deductible related-party payment’ means any pay-
ment made, directly or indirectly, by any person to 
any other person if the payment is allowable as a de-
duction under this chapter and both persons are 
members of the same foreign controlled group of en-
tities. 
‘‘(3) FOREIGN CONTROLLED GROUP OF ENTI-
TIES.—For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘foreign 
controlled group of entities’ means a controlled 
group of entities the common parent of which 
is a foreign corporation. 
‘‘(B) CONTROLLED GROUP OF ENTITIES.— 
The term ‘controlled group of entities’ means a 
controlled group of corporations as defined in 
section 1563(a)(1), except that— 
‘‘(i) ‘more than 50 percent’ shall be 
substituted for ‘at least 80 percent’ each 
place it appears therein, and 
‘‘(ii) the determination shall be made 
without regard to subsections (a)(4) and 
(b)(2) of section 1563. 
A partnership or any other entity (other than a 
corporation) shall be treated as a member of a 
controlled group of entities if such entity is con-
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trolled 
(within 
the 
meaning 
of 
section 
954(d)(3)) by members of such group (includ-
ing any entity treated as a member of such 
group by reason of this sentence). 
‘‘(4) FOREIGN
PARENT
CORPORATION.—For 
purposes of this subsection, the term ‘foreign parent 
corporation’ means, with respect to any deductible 
related-party payment, the common parent of the 
foreign controlled group of entities referred to in 
paragraph (3)(A). 
‘‘(5) REGULATIONS.—The Secretary may pre-
scribe such regulations or other guidance as are nec-
essary or appropriate to carry out the purposes of 
this subsection, including regulations or other guid-
ance which provide for— 
‘‘(A) the treatment of two or more persons 
as members of a foreign controlled group of en-
tities if such persons would be the common par-
ent of such group if treated as one corporation, 
and 
‘‘(B) the treatment of any member of a 
foreign controlled group of entities as the com-
mon parent of such group if such treatment is 
appropriate taking into account the economic 
relationships among such entities.’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to payments made after the date 
of the enactment of this Act. 
Subtitle D—Modification of 
Accounting Rules 
SEC. 3301. REPEAL OF LAST-IN, FIRST-OUT METHOD OF IN-
VENTORY. 
(a) IN GENERAL.—Subpart D of part II of sub-
chapter E of chapter 1 is amended by striking sections 
472 (relating to last-in, first-out inventories), 473 (relat-
ing to qualified liquidations of LIFO inventories), and 474 
(relating to simplified dollar-value LIFO method for cer-
tain small businesses). 
(b) CONFORMING AMENDMENTS.— 
(1)(A) Section 312(n) is amended by striking 
paragraph (4) and by redesignating paragraphs (5) 
through (8) as paragraphs (4) through (7), respec-
tively. 
(B) Section 312(n)(7), as redesignated by sub-
paragraph (A), is amended— 
(i) by striking ‘‘paragraphs (4) and (6)’’ in 
subparagraph (A) and inserting ‘‘paragraph 
(5)’’, and 
(ii) by striking ‘‘paragraph (5)’’ in sub-
paragraph (B) and inserting ‘‘paragraph (4)’’. 
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payer under section 481 of the Internal Rev-
enue Code of 1986 is positive, such amount 
shall be taken into account over a period of 8 
years beginning with such first taxable year. 
SEC. 3303. SPECIAL RULE FOR SERVICE PROVIDERS ON AC-
CRUAL METHOD NOT APPLICABLE TO C COR-
PORATIONS. 
(a) IN GENERAL.—Subparagraph (A) of section 
448(d)(5) is amended by inserting ‘‘(other than a C cor-
poration)’’ after ‘‘any person’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after the date of the enactment of this Act. 
(2) CHANGE IN METHOD OF ACCOUNTING.—In 
the case of any taxpayer required by the amend-
ments made by this section to change its method of 
accounting for its first taxable year beginning after 
the date of the enactment of this Act— 
(A) such change shall be treated as initi-
ated by the taxpayer, 
(B) such change shall be treated as made 
with the consent of the Secretary of the Treas-
ury, and 
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(C) if the net amount of the adjustments 
required to be taken into account by the tax-
payer under section 481 of the Internal Rev-
enue Code of 1986 is positive, such amount 
shall be taken into account over a period of 8 
years beginning with such first taxable year. 
Subtitle E—Modification to 
Expensing and Depreciation Rules 
SEC. 3401. SMALL BUSINESS EXPENSING PROVISIONS MADE 
PERMANENT. 
(a) INCREASE
IN SMALL BUSINESS EXPENSING 
MADE PERMANENT.—Subsection (b) of section 179 is 
amended— 
(1) by striking ‘‘$25,000 ($125,000 in the case 
of taxable years beginning after 2006 and before 
2011)’’ in paragraph (1) and inserting ‘‘$125,000’’, 
and 
(2) by striking ‘‘$200,000 ($500,000 in the 
case of taxable years beginning after 2006 and be-
fore 2011)’’ in paragraph (2) and inserting 
‘‘$500,000’’. 
(b) EXPENSING FOR COMPUTER SOFTWARE MADE 
PERMANENT.—Clause (ii) of section 179(d)(1)(A) is 
amended by striking ‘‘and which is placed in service in 
a taxable year beginning after 2002 and before 2011,’’. 
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(c) INFLATION ADJUSTMENT.—Subparagraph (A) of 
section 179(b)(5) is amended by striking ‘‘In the case of 
any taxable year beginning in a calendar year after 2007 
and before 2011, the’’ and inserting ‘‘The’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to taxable years beginning after the date 
of the enactment of this Act. 
(2) COMPUTER
SOFTWARE.—The amendment 
made by subsection (b) shall apply to property 
placed in service after the date of the enactment of 
this Act. 
SEC. 3402. AMORTIZATION OF GOODWILL AND OTHER IN-
TANGIBLES. 
(a) IN GENERAL.—Subsection (a) of section 197 (re-
lating to general rule) is amended by striking ‘‘15-year’’ 
and inserting ‘‘20-year’’. 
(b) CERTAIN INTERESTS OR RIGHTS ACQUIRED SEP-
ARATELY.—Clause (i) of section 197(e)(4)(D) is amended 
by striking ‘‘15 years’’ and inserting ‘‘20 years’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property acquired after the date 
of the enactment of this Act. 
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112 
Subtitle F—Codification of 
Economic Substance Doctrine 
SEC. 3501. CODIFICATION OF ECONOMIC SUBSTANCE DOC-
TRINE. 
(a) IN GENERAL.—Section 7701 is amended by re-
designating subsection (p) as subsection (q) and by insert-
ing after subsection (o) the following new subsection: 
‘‘(p) CLARIFICATION
OF
ECONOMIC
SUBSTANCE 
DOCTRINE.— 
‘‘(1) APPLICATION OF DOCTRINE.—In the case 
of any transaction to which the economic substance 
doctrine is relevant, such transaction shall be treated 
as having economic substance only if— 
‘‘(A) the transaction changes in a mean-
ingful way (apart from Federal income tax ef-
fects) the taxpayer’s economic position, and 
‘‘(B) the taxpayer has a substantial pur-
pose (apart from Federal income tax effects) 
for entering into such transaction. 
‘‘(2) SPECIAL RULE WHERE TAXPAYER RELIES 
ON PROFIT POTENTIAL.— 
‘‘(A) IN
GENERAL.—The potential for 
profit of a transaction shall be taken into ac-
count in determining whether the requirements 
of subparagraphs (A) and (B) of paragraph (1) 
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are met with respect to the transaction only if 
the present value of the reasonably expected 
pre-tax profit from the transaction is substan-
tial in relation to the present value of the ex-
pected net tax benefits that would be allowed if 
the transaction were respected. 
‘‘(B) TREATMENT OF FEES AND FOREIGN 
TAXES.—Fees and other transaction expenses 
and foreign taxes shall be taken into account as 
expenses in determining pre-tax profit under 
subparagraph (A). 
‘‘(3) STATE AND LOCAL TAX BENEFITS.—For 
purposes of paragraph (1), any State or local income 
tax effect which is related to a Federal income tax 
effect shall be treated in the same manner as a Fed-
eral income tax effect. 
‘‘(4) FINANCIAL ACCOUNTING BENEFITS.—For 
purposes of paragraph (1)(B), achieving a financial 
accounting benefit shall not be taken into account as 
a purpose for entering into a transaction if such 
transaction results in a Federal income tax benefit. 
‘‘(5) DEFINITIONS AND SPECIAL RULES.—For 
purposes of this subsection— 
‘‘(A) ECONOMIC SUBSTANCE DOCTRINE.— 
The term ‘economic substance doctrine’ means 
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the common law doctrine under which tax bene-
fits under subtitle A with respect to a trans-
action are not allowable if the transaction does 
not have economic substance or lacks a business 
purpose. 
‘‘(B) EXCEPTION FOR PERSONAL TRANS-
ACTIONS OF INDIVIDUALS.—In the case of an 
individual, paragraph (1) shall apply only to 
transactions entered into in connection with a 
trade or business or an activity engaged in for 
the production of income. 
‘‘(C) OTHER
COMMON
LAW
DOCTRINES 
NOT
AFFECTED.—Except as specifically pro-
vided in this subsection, the provisions of this 
subsection shall not be construed as altering or 
supplanting any other rule of law, and the re-
quirements of this subsection shall be construed 
as being in addition to any such other rule of 
law. 
‘‘(D) DETERMINATION OF APPLICATION OF 
DOCTRINE NOT AFFECTED.—The determination 
of whether the economic substance doctrine is 
relevant to a transaction shall be made in the 
same manner as if this subsection had never 
been enacted. 
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‘‘(6) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary or ap-
propriate to carry out the purposes of this sub-
section. Such regulations may include exemptions 
from the application of this subsection.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transactions entered into after 
the date of the enactment of this Act. 
SEC. 3502. PENALTIES FOR UNDERPAYMENTS. 
(a) PENALTY FOR UNDERPAYMENTS ATTRIBUTABLE 
TO TRANSACTIONS LACKING ECONOMIC SUBSTANCE.— 
(1) IN
GENERAL.—Subsection (b) of section 
6662, as amended by this Act, is amended by insert-
ing after paragraph (6) the following new para-
graph: 
‘‘(7) Any disallowance of claimed tax benefits 
by reason of a transaction lacking economic sub-
stance (within the meaning of section 7701(p)) or 
failing to meet the requirements of any similar rule 
of law.’’. 
(2) INCREASED PENALTY FOR NONDISCLOSED 
TRANSACTIONS.—Section 6662, as amended by this 
Act, is amended by adding at the end the following 
new subsection: 
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‘‘(j) INCREASE IN PENALTY IN CASE OF NONDIS-
CLOSED NONECONOMIC SUBSTANCE TRANSACTIONS.— 
‘‘(1) IN GENERAL.—To the extent that a por-
tion of the underpayment to which this section ap-
plies is attributable to one or more nondisclosed non-
economic substance transactions, subsection (a) shall 
be applied with respect to such portion by sub-
stituting ‘40 percent’ for ‘20 percent’. 
‘‘(2) 
NONDISCLOSED
NONECONOMIC
SUB-
STANCE TRANSACTIONS.—For purposes of this sub-
section, the term ‘nondisclosed noneconomic sub-
stance transaction’ means any portion of a trans-
action described in subsection (b)(7) with respect to 
which the relevant facts affecting the tax treatment 
are not adequately disclosed in the return nor in a 
statement attached to the return. 
‘‘(3) 
SPECIAL
RULE
FOR
AMENDED
RE-
TURNS.—Except as provided in regulations, in no 
event shall any amendment or supplement to a re-
turn of tax be taken into account for purposes of 
this subsection if the amendment or supplement is 
filed after the earlier of the date the taxpayer is first 
contacted by the Secretary regarding the examina-
tion of the return or such other date as is specified 
by the Secretary.’’. 
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(3) CONFORMING AMENDMENT.—Subparagraph 
(B) of section 6662A(e)(2), as amended by this Act, 
is amended by striking ‘‘subsection (h) or (i)’’ and 
inserting ‘‘subsections (h), (i), or (j)’’. 
(b) REASONABLE CAUSE EXCEPTION NOT APPLICA-
BLE TO NONECONOMIC SUBSTANCE TRANSACTIONS, TAX 
SHELTERS, AND CERTAIN LARGE CORPORATIONS.—Para-
graph (2) of section 6664(c), as amended by this Act, is 
amended— 
(1) by striking ‘‘shall not apply to any portion’’ 
and inserting ‘‘shall not apply— 
‘‘(A) to any portion’’, 
(2) by striking the period at the end and insert-
ing a comma, and 
(3) by adding at the end the following new sub-
paragraphs: 
‘‘(B) to any portion of an underpayment 
which is attributable to one or more tax shelters 
(as defined in section 6662(d)(2)(C)) or trans-
actions described in section 6662(b)(7), and 
‘‘(C) to any taxpayer if such taxpayer is a 
specified large corporation (as defined in section 
6662(d)(2)(D)(ii)).’’. 
(c) SPECIAL UNDERSTATEMENT REDUCTION RULE 
FOR CERTAIN LARGE CORPORATIONS.— 
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(1) IN
GENERAL.—Paragraph (2) of section 
6662(d) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) SPECIAL REDUCTION RULE FOR CER-
TAIN LARGE CORPORATIONS.— 
‘‘(i) IN GENERAL.—In the case of any 
specified large corporation— 
‘‘(I) subparagraph (B) shall not 
apply, and 
‘‘(II) the amount of the under-
statement under subparagraph (A) 
shall be reduced by that portion of the 
understatement which is attributable 
to any item with respect to which the 
taxpayer has a reasonable belief that 
the tax treatment of such item by the 
taxpayer is more likely than not the 
proper tax treatment of such item. 
‘‘(ii) SPECIFIED
LARGE
CORPORA-
TION.— 
‘‘(I) IN GENERAL.—For purposes 
of this subparagraph, the term ‘speci-
fied large corporation’ means any cor-
poration with gross receipts in excess 
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of $100,000,000 for the taxable year 
involved. 
‘‘(II) AGGREGATION
RULE.—All 
persons treated as a single employer 
under section 52(a) shall be treated as 
one person for purposes of subclause 
(I).’’. 
(2) CONFORMING AMENDMENT.—Subparagraph 
(C) of section 6662(d)(2) is amended by striking 
‘‘Subparagraph (B)’’ and inserting ‘‘Subparagraphs 
(B) and (D)(i)(II)’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Subtitle G—Modifications to 
Deductions for Dividends Received 
SEC. 3601. MODIFICATIONS TO DEDUCTIONS FOR DIVI-
DENDS RECEIVED. 
(a) GENERAL REDUCTION IN PERCENTAGE OF DE-
DUCTION.— 
(1) 
IN
GENERAL.—Sections 
243(a)(1), 
243(c)(1), 
244(a)(3), 
244(b)(2), 
245(c)(1)(B), 
246(b)(3)(B), and 246A(a)(1), before amendment by 
subsection (c), are each amended by striking ‘‘70 
percent’’ and inserting ‘‘60 percent’’. 
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(2) CONFORMING
AMENDMENTS.—Paragraph 
(2) of section 861(a), before amendment by sub-
section (c), is amended by striking ‘‘100/70th’’ both 
places it appears and inserting ‘‘100/60th’’. 
(b) REDUCTION IN PERCENTAGE FOR 20-PERCENT 
OWNED CORPORATIONS.— 
(1) 
IN
GENERAL.—Sections 
243(c)(1), 
245(c)(1)(B), 246(b)(3)(A), 246A(a)(1) is amended 
by striking ‘‘80 percent’’ and inserting ‘‘70 per-
cent’’. 
(2) CONFORMING AMENDMENT.—Paragraph (2) 
of section 861(a) is amended by striking ‘‘100/80th’’ 
and inserting ‘‘100/70th’’. 
(c) REPEAL OF NOL EXCEPTION TO LIMITATION ON 
AGGREGATE
DEDUCTIONS; 
ESTABLISHMENT
OF 
CARRYFORWARD.— 
(1) IN
GENERAL.—Paragraph (2) of section 
246(b) is amended to read as follows: 
‘‘(2) CARRYFORWARD.—The aggregate amount 
of deductions disallowed under paragraph (1) for 
any taxable year shall be treated as an increase in 
the amount allowable as a deduction under section 
243(a)(1) for the following taxable year (subject to 
the application of paragraph (1) to such following 
taxable year).’’. 
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(2) CONFORMING AMENDMENTS.— 
(A) Subsection (d) of section 172 is 
amended by striking paragraph (5) and by re-
designating paragraph (6) as paragraph (5). 
(B) Subparagraph (A) of section 172(b)(2) 
is amended by striking ‘‘paragraphs (1), (4), 
and (5)’’ and inserting ‘‘paragraphs (1) and 
(4)’’. 
(C) Paragraph (1) of section 246(b) is 
amended by striking ‘‘Except as provided in 
paragraph (2), the’’ and inserting ‘‘The’’. 
(D) Paragraph (3) of section 246(b) is 
amended by striking ‘‘paragraph (1)’’and in-
serting ‘‘paragraphs (1) and (2)’’. 
(E) Subparagraph (B) of section 805(a)(4) 
is amended by striking ‘‘section 1212(a)(1),’’ 
and all that follows and inserting ‘‘section 
1212(a)(1).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
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Subtitle H—Other Provisions 
SEC. 3701. RECOGNITION OF ORDINARY INCOME ON SALE 
OR EXERCISE OF STOCK OPTION IN S COR-
PORATION WITH AN ESOP. 
(a) IN GENERAL.—Subpart A of part I of subchapter 
D of chapter 1 is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 409B. RECOGNITION OF ORDINARY INCOME ON SALE 
OR EXERCISE OF STOCK OPTION IN S COR-
PORATION WITH AN ESOP. 
‘‘(a) IN GENERAL.—If an S corporation in which an 
employee stock ownership plan is a stockholder grants an 
option with respect to its stock and such option is sold 
or exercised, there shall be included in the gross income 
of the holder of such option (determined immediately be-
fore such sale or exercise) as ordinary income an amount 
equal to the income inclusion amount. 
‘‘(b) INCOME INCLUSION AMOUNT.—For purposes of 
this section, the term ‘income inclusion amount’ means, 
with respect to the holder of any option, the excess (if 
any) of— 
‘‘(1) the sum of the net income amounts with 
respect to such option for all taxable years of the S 
corporation ending during the taxpayer’s holding pe-
riod, over 
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‘‘(2) the sum of the net loss amounts with re-
spect to such option for all such taxable years. 
‘‘(c) NET INCOME AND LOSS AMOUNTS.—For pur-
poses of this section, with respect to any taxable year of 
the S corporation— 
‘‘(1) NET INCOME AMOUNT.—The term ‘net in-
come amount’ means the excess (if any) of— 
‘‘(A) the pass-thru income share for such 
taxable year, over 
‘‘(B) the pass-thru loss share for such tax-
able year. 
‘‘(2) NET LOSS AMOUNT.—The term ‘net loss 
amount’ means the excess (if any) of the amount de-
scribed in paragraph (1)(B) over the amount de-
scribed in paragraph (1)(A). 
‘‘(d) PASS-THRU INCOME AND LOSS SHARES.—For 
purposes of this section, with respect to any taxable year 
of the S corporation— 
‘‘(1) PASS-THRU
INCOME
SHARE.—The term 
‘pass-thru income share’ means the excess (if any) 
of— 
‘‘(A) the aggregate items of income taken 
into account under section 1366 by the em-
ployee stock ownership plan for such taxable 
year, over 
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‘‘(B) the aggregate items of income which 
would have been so taken into account if such 
option had been exercised upon being granted. 
‘‘(2) PASS-THRU
LOSS
SHARE.—The term 
‘pass-thru loss share’ means the excess (if any) of— 
‘‘(A) the aggregate items of deduction and 
loss taken into account under section 1366 by 
the employee stock ownership plan for such tax-
able year, over 
‘‘(B) the aggregate items of deduction and 
loss which would have been so taken into ac-
count if such option had been exercised upon 
being granted. 
‘‘(e) INTEREST AT UNDERPAYMENT RATE.— 
‘‘(1) IN GENERAL.—In the case of any taxpayer 
who includes any amount in gross income for any 
taxable year under subsection (a), the tax imposed 
by this chapter on such taxpayer for such taxable 
year shall be increased by interest at the under-
payment rate determined under section 6621 on the 
underpayments that would have occurred had the 
net income amounts with respect to each taxable 
year taken into account under subsection (c) been 
includible in the taxpayer’s gross income for each of 
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taxable year of the taxpayer in or with which the 
taxable year so taken into account ends. 
‘‘(2) REDUCTION
FOR
PREVIOUS
NET
LOSS 
AMOUNTS.—For purposes of paragraph (1), the net 
income amount for any taxable year shall be reduced 
by the excess of— 
‘‘(A) the aggregate net loss amounts for 
taxable years taken into account under sub-
section (c) with respect to the taxpayer, over 
‘‘(B) the amount of such aggregate pre-
viously taken into account under this paragraph 
to reduce any net income amount. 
‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
‘‘(1) OPTION.—The term ‘option’ includes any 
synthetic equity described in section 409(p)(6)(C). 
‘‘(2) EFFECT OF STARTING OR TERMINATING 
AN S CORPORATION ELECTION.—With respect to any 
option, a corporation which is an S corporation for 
any taxable year which ends while such option is 
outstanding shall be treated for purposes of this sec-
tion (other than subsection (d)) as an S corporation 
for all taxable years which end while such option is 
outstanding. 
‘‘(3) ADJUSTMENTS TO BASIS.— 
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‘‘(A) INCREASE
IN
BASIS
OF
ACQUIRED 
STOCK.—The taxpayer’s basis in any stock ac-
quired pursuant to the exercise of an option to 
which subsection (a) applies shall be increased 
by the amount included in gross income by the 
taxpayer under subsection (a) with respect to 
such option. 
‘‘(B) INCREASE IN BASIS OF OPTION ON 
SALE.—The taxpayer’s basis in any option shall 
be increased by the amount included in gross 
income by the taxpayer under subsection (a) 
with respect to such option.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 26(b)(2), as amended by this Act, 
is amended by striking ‘‘and’’ at the end of subpara-
graph (T), by striking the period at the end of sub-
paragraph (U) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
‘‘(V) subsection (e) of section 409B (relat-
ing to interest on income recognized upon exer-
cise of a stock option in an S corporation with 
an ESOP).’’. 
(2) Section 1016(a) is amended by striking 
‘‘and’’ at the end of paragraph (36), by striking the 
period at the end of paragraph (37) and inserting ‘‘, 
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‘‘(b) NO NEW ELECTION.—No election may be made 
under section 992(b) for any taxable year beginning after 
December 31, 2007. 
‘‘(c) EFFECT OF TERMINATION.—A shareholder of a 
corporation whose election is terminated by reason of sub-
section (a) shall be deemed to have received a distribution 
to which section 995(b)(2) applies. Such distribution (or 
any actual distribution after termination to the extent 
paid out of the corporation’s accumulated DISC income) 
shall not be treated as qualified dividend income (within 
the meaning of section 1(h)(11)(B)).’’. 
(b) CONFORMING AMENDMENT.—The table of con-
tents for part IV of subchapter N of chapter 1 is amended 
by adding at the end the following new item: 
‘‘SUBPART C—TERMINATION’’. 
SEC. 3703. TREATMENT OF SECURITIES OF A CONTROLLED 
CORPORATION EXCHANGED FOR ASSETS IN 
CERTAIN REORGANIZATIONS. 
(a) IN GENERAL.—Section 361 (relating to non-
recognition of gain or loss to corporations; treatment of 
distributions) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(d) RECEIPT OF SECURITIES, ETC., IN EXCHANGE 
FOR ASSETS IN CERTAIN REORGANIZATIONS.—If— 
‘‘(1) property is transferred to a corporation 
(hereinafter in this subsection referred to as the 
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‘controlled corporation’) pursuant to a plan of reor-
ganization described in section 368(a)(1)(D), and 
‘‘(2) pursuant to such plan of reorganization, 
stock or securities in the controlled corporation are 
distributed in a transaction which qualifies under 
section 355, 
then any securities and nonqualified preferred stock (as 
defined in section 351(g)(2)) of the controlled corporation 
shall be treated as other property for purposes of sub-
sections (a) and (b).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to distributions after the date 
of the enactment of this Act. 
Æ 
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