I 
115TH CONGRESS 
1ST SESSION H. R. 4383 
To reform the Internal Revenue Code of 1986. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 14, 2017 
Mr. BIGGS introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To reform the Internal Revenue Code of 1986. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. CLARIFICATION. 
(a) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(b) TABLE OF CONTENTS.—The table of contents for 
this title is as follows: 
Section 1. Clarification. 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6211
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
TITLE I—IMMEDIATE COST RECOVERY 
Sec. 101. Repeal of certain limitations on the expensing of section 179 prop-
erty. 
Sec. 102. Election of shorter recovery period for purpose of determining depre-
ciation deduction. 
TITLE II—REDUCED RATE ON BUSINESS INCOME 
Sec. 201. Reduced corporate rate. 
Sec. 202. Reduced rate on other business income. 
TITLE III—EXEMPTION SYSTEM FOR TAXATION OF FOREIGN 
INCOME 
Sec. 301. Deduction for dividends received by domestic corporations from cer-
tain foreign corporations. 
Sec. 302. Treatment of deferred foreign income upon transition to participation 
exemption system of taxation. 
Sec. 303. Look-thru rule for related controlled foreign corporations made per-
manent. 
Sec. 304. Repeal of section 902 indirect foreign tax credits; determination of 
section 960 credit on current year basis. 
TITLE IV—REDUCED RATES FOR INDIVIDUALS 
Sec. 401. Reduced rates for individuals. 
TITLE V—TAX-EXEMPT REORGANIZATIONS 
Sec. 501. No taxable event for change of corporate form. 
TITLE VI—REPEAL OF NET INVESTMENT INCOME TAX 
Sec. 601. Repeal of net investment income tax. 
TITLE VII—REPEAL OF ESTATE TAX 
Sec. 701. Repeal of estate tax and retention of basis step-up. 
TITLE I—IMMEDIATE COST 
RECOVERY 
SEC. 101. REPEAL OF CERTAIN LIMITATIONS ON THE EX-
PENSING OF SECTION 179 PROPERTY. 
(a) IN GENERAL.—Section 179 is amended by strik-
ing subsections (b) and (e) and by redesignating sub-
sections (c), (d), and (f) as subsections (b), (c), and (d), 
respectively. 
(b) CONFORMING AMENDMENTS.— 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
(1) Subsection (c) of section 179, as redesig-
nated by subsection (a), is amended by striking 
paragraphs (6) and (8), and by redesignating para-
graphs (7), (9), and (10) as paragraphs (6), (7), 
and (8), respectively. 
(2) Paragraph (6) of section 179(c), as redesig-
nated by paragraph (1) and subsection (a), is 
amended by striking ‘‘paragraphs (2) and (6)’’ and 
inserting ‘‘paragraph (2)’’. 
(3) Section 42(d)(2)(B)(i) is amended by strik-
ing ‘‘section 179(d)(2)’’ and inserting ‘‘section 
179(c)(2)’’. 
(4) Subclause (I) of section 42(d)(2)(D)(iii) is 
amended— 
(A) by striking ‘‘section 179(d)’’ and in-
serting ‘‘section 179(c)’’; and 
(B) by striking ‘‘section 179(d)(7)’’ and 
inserting ‘‘section 179(c)(6)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service during 
taxable years beginning after December 31, 2016. 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
the first day of the taxable year which includes Jan-
uary 1, 2017. The application of this paragraph 
shall not be treated as a change in method of ac-
counting for purposes of section 481.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to property placed in service be-
fore, on, or after January 1, 2017. 
TITLE II—REDUCED RATE ON 
BUSINESS INCOME 
SEC. 201. REDUCED CORPORATE RATE. 
(a) IN GENERAL.—Section 11(b) is amended to read 
as follows: 
‘‘(b) AMOUNT OF TAX.—The amount of the tax im-
posed by subsection (a) shall be 15 percent of taxable in-
come.’’. 
(b) CONFORMING AMENDMENTS.—Paragraphs (1), 
(2), and (6) of section 1445(e) are each amended by strik-
ing ‘‘35 percent’’ and inserting ‘‘15 percent’’. 
(c) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2016. 
(2) CERTAIN CONFORMING AMENDMENTS.—The 
amendments made by subsection (b) shall apply to 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
transfers, dispositions, and distributions, after such 
date. 
SEC. 202. REDUCED RATE ON OTHER BUSINESS INCOME. 
(a) IN GENERAL.—Section 1 is amended by adding 
at the end the following new subsection: 
‘‘(j) MAXIMUM RATE ON BUSINESS INCOME.— 
‘‘(1) IN GENERAL.—The rate of tax imposed 
under this section on business income shall not ex-
ceed 15 percent. 
‘‘(2) BUSINESS INCOME.—The term ‘business 
income’ means the excess (if any) of— 
‘‘(A) any distributional or pro rata share 
of items of income or gain from a partnership 
or S corporation and any income or gain prop-
erly allocable to a sole proprietorship, over 
‘‘(B) any distributional or pro rata share 
of items of deduction or loss from a partnership 
or S corporation and any deduction or loss 
properly allocable to a sole proprietorship.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2016. 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
TITLE III—EXEMPTION SYSTEM 
FOR TAXATION OF FOREIGN 
INCOME 
SEC. 301. DEDUCTION FOR DIVIDENDS RECEIVED BY DO-
MESTIC CORPORATIONS FROM CERTAIN FOR-
EIGN CORPORATIONS. 
(a) IN GENERAL.—Part VIII of subchapter B of 
chapter 1 is amended by inserting after section 245 the 
following new section: 
‘‘SEC. 245A. DIVIDENDS RECEIVED BY DOMESTIC CORPORA-
TIONS FROM CERTAIN FOREIGN CORPORA-
TIONS. 
‘‘(a) IN GENERAL.—In the case of any dividend re-
ceived from a specified 10-percent owned foreign corpora-
tion by a domestic corporation which is a United States 
shareholder with respect to such foreign corporation, there 
shall be allowed as a deduction an amount equal to 95 
percent of the foreign-source portion of such dividend. 
‘‘(b) SPECIFIED 10-PERCENT OWNED FOREIGN COR-
PORATION.—For purposes of this section, the term ‘speci-
fied 10-percent owned foreign corporation’ means any for-
eign corporation if any domestic corporation owns directly, 
or indirectly through a chain of ownership described under 
section 958(a), 10 percent or more of the voting stock of 
such foreign corporation. 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
‘‘(c) FOREIGN-SOURCE PORTION.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The foreign-source portion 
of any dividend is an amount which bears the same 
ratio to such dividends as— 
‘‘(A) the post-1986 undistributed foreign 
earnings, bears to 
‘‘(B) the total post-1986 undistributed 
earnings. 
‘‘(2) POST-1986
UNDISTRIBUTED
EARNINGS.— 
The term ‘post-1986 undistributed earnings’ means 
the amount of the earnings and profits of the speci-
fied 10-percent owned foreign corporation (computed 
in accordance with sections 964(a) and 986) accu-
mulated in taxable years beginning after December 
31, 1986— 
‘‘(A) as of the close of the taxable year of 
the specified 10-percent owned foreign corpora-
tion in which the dividend is distributed, and 
‘‘(B) without diminution by reason of divi-
dends distributed during such taxable year. 
‘‘(3) 
POST-1986
UNDISTRIBUTED
FOREIGN 
EARNINGS.—The term ‘post-1986 undistributed for-
eign earnings’ means the portion of the post-1986 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
undistributed earnings which is attributable to nei-
ther— 
‘‘(A) income described in subparagraph (A) 
of section 245(a)(5), nor 
‘‘(B) dividends described in subparagraph 
(B) of such section (determined without regard 
to section 245(a)(12)). 
‘‘(4) TREATMENT
OF
DISTRIBUTIONS
FROM 
EARNINGS BEFORE 1987.— 
‘‘(A) IN GENERAL.—In the case of any div-
idend paid out of earnings and profits of the 
specified 10-percent owned foreign corporation 
(computed in accordance with sections 964(a) 
and 986) accumulated in taxable years begin-
ning before January 1, 1987— 
‘‘(i) paragraphs (1), (2), and (3) shall 
be applied without regard to the phrase 
‘post-1986’ each place it appears, and 
‘‘(ii) paragraph (2) shall be applied 
without regard to the phrase ‘in taxable 
years beginning after December 31, 1986’. 
‘‘(B) DIVIDENDS
PAID
FIRST
OUT
OF 
POST-1986 EARNINGS.—Dividends shall be treat-
ed as paid out of post-1986 undistributed earn-
ings to the extent thereof. 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
‘‘(d) DISALLOWANCE
OF FOREIGN TAX CREDIT, 
ETC.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under section 901 for any taxes paid or accrued (or 
treated as paid or accrued) with respect to any divi-
dend for which a deduction is allowed under this sec-
tion. 
‘‘(2) DENIAL
OF
DEDUCTION.—No deduction 
shall be allowed under this chapter for any tax for 
which credit is not allowable under section 901 by 
reason of paragraph (1) (determined by treating the 
taxpayer as having elected the benefits of subpart A 
of part III of subchapter N). 
‘‘(e) REGULATIONS.—The Secretary may prescribe 
such regulations or other guidance as may be necessary 
or appropriate to carry out the provisions of this section.’’. 
(b) APPLICATION OF HOLDING PERIOD REQUIRE-
MENT.—Subsection (c) of section 246 is amended— 
(1) by striking ‘‘or 245’’ in paragraph (1) and 
inserting ‘‘245, or 245A’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(5) SPECIAL
RULES
FOR
FOREIGN
SOURCE 
PORTION OF DIVIDENDS RECEIVED FROM SPECIFIED 
10-PERCENT OWNED FOREIGN CORPORATIONS.— 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
‘‘(A) 6-MONTH HOLDING PERIOD REQUIRE-
MENT.—For purposes of section 245A— 
‘‘(i) paragraph (1)(A) shall be ap-
plied— 
‘‘(I) by substituting ‘180 days’ 
for ‘45 days’ each place it appears, 
and 
‘‘(II) by substituting ‘361-day pe-
riod’ for ‘91-day period’, and 
‘‘(ii) paragraph (2) shall not apply. 
‘‘(B) STATUS MUST BE MAINTAINED DUR-
ING HOLDING PERIOD.—For purposes of section 
245A, the holding period requirement of this 
subsection shall be treated as met only if— 
‘‘(i) the specified 10-percent owned 
corporation referred to in section 245A(a) 
is a specified 10-percent owned corporation 
at all times during such period, and 
‘‘(ii) the taxpayer is a United States 
shareholder with respect to such specified 
10-percent owned corporation at all times 
during such period.’’. 
(c) APPLICATION OF RULES GENERALLY APPLICA-
BLE TO DEDUCTIONS FOR DIVIDENDS RECEIVED.— 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
(1) TREATMENT OF DIVIDENDS FROM CERTAIN 
CORPORATIONS.—Paragraph (1) of section 246(a) is 
amended by striking ‘‘and 245’’ and inserting ‘‘245, 
and 245A’’. 
(2) ASSETS GENERATING TAX-EXEMPT PORTION 
OF DIVIDEND NOT TAKEN INTO ACCOUNT IN ALLO-
CATING
AND
APPORTIONING
DEDUCTIBLE
EX-
PENSES.—Paragraph (3) of section 864(e) is amend-
ed by striking ‘‘or 245(a)’’ and inserting ‘‘, 245(a), 
or 245A’’. 
(3) COORDINATION WITH SECTION 1059.—Sub-
paragraph (B) of section 1059(b)(2) is amended by 
striking ‘‘or 245’’ and inserting ‘‘245, or 245A’’. 
(d) COORDINATION WITH FOREIGN TAX CREDIT 
LIMITATION.—Subsection (b) of section 904, as amended 
by the preceding provisions of this Act, is amended by re-
designating paragraph (2) as paragraph (1) and by adding 
at the end the following new paragraph: 
‘‘(2) TREATMENT OF DIVIDENDS FOR WHICH 
DEDUCTION IS ALLOWED UNDER SECTION 245A.— 
For purposes of subsection (a), in the case of a do-
mestic corporation which is a United States share-
holder with respect to a specified 10-percent owned 
foreign corporation, such domestic corporation’s tax-
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
able income from sources without the United States 
shall be determined without regard to— 
‘‘(A) the foreign-source portion of any divi-
dend received from such foreign corporation, 
and 
‘‘(B) any deductions properly allocable to 
such portion. 
Any term which is used in section 245A and in this 
paragraph shall have the same meaning for purposes 
of this paragraph as when used in such section.’’. 
(e) CONFORMING AMENDMENTS.— 
(1) Paragraph (4) of section 245(a) is amended 
by striking ‘‘section 902(c)(1)’’ and inserting ‘‘sec-
tion 245A(c)(2)’’. 
(2) Subsection (b) of section 951 is amended by 
striking ‘‘subpart’’ and inserting ‘‘title’’. 
(3) Subsection (a) of section 957 is amended by 
striking ‘‘subpart’’ in the matter preceding para-
graph (1) and inserting ‘‘title’’. 
(4) The table of sections for part VIII of sub-
chapter B of chapter 1 is amended by inserting after 
the item relating to section 245 the following new 
item: 
‘‘Sec. 245A. Dividends received by domestic corporations from certain foreign 
corporations.’’. 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6211
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years of foreign corpora-
tions beginning after December 31, 2016, and to taxable 
years of United States shareholders in which or with which 
such taxable years of foreign corporations end. 
SEC. 302. TREATMENT OF DEFERRED FOREIGN INCOME 
UPON TRANSITION TO PARTICIPATION EX-
EMPTION SYSTEM OF TAXATION. 
(a) IN GENERAL.—Section 965 is amended to read 
as follows: 
‘‘SEC. 965. TREATMENT OF DEFERRED FOREIGN INCOME 
UPON TRANSITION TO PARTICIPATION EX-
EMPTION SYSTEM OF TAXATION. 
‘‘(a) TREATMENT OF DEFERRED FOREIGN INCOME 
AS SUBPART F INCOME.—In the case of the last taxable 
year of a deferred foreign income corporation which begins 
before December 31, 2016, the subpart F income of such 
foreign corporation (as otherwise determined for such tax-
able year under section 952) shall be increased by the ac-
cumulated post-1986 deferred foreign income of such cor-
poration determined as of the close of such taxable year. 
‘‘(b) REDUCTION IN AMOUNTS INCLUDED IN GROSS 
INCOME OF UNITED STATES SHAREHOLDERS OF SPECI-
FIED FOREIGN CORPORATIONS WITH DEFICITS IN EARN-
INGS AND PROFITS.— 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
‘‘(1) IN GENERAL.—In the case of a taxpayer 
which is a United States shareholder with respect to 
at least one deferred foreign income corporation and 
at least one E&P deficit foreign corporation, the 
amount which would (but for this subsection) be 
taken into account under section 951(a)(1) by rea-
son of subsection (a) as such United States share-
holder’s pro rata share of the subpart F income of 
each deferred foreign income corporation shall be re-
duced (but not below zero) by the amount of such 
United States shareholder’s aggregate foreign E&P 
deficit which is allocated under paragraph (2) to 
such deferred foreign income corporation. 
‘‘(2) ALLOCATION OF AGGREGATE FOREIGN E&P 
DEFICIT.—The aggregate foreign E&P deficit of any 
United States shareholder shall be allocated among 
the deferred foreign income corporations of such 
United States shareholder in an amount which bears 
the same proportion to such aggregate as— 
‘‘(A) such United States shareholder’s pro 
rata share of the accumulated post-1986 de-
ferred foreign income of each such deferred for-
eign income corporation, bears to 
‘‘(B) the aggregate of such United States 
shareholder’s pro rata share of the accumulated 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
post-1986 deferred foreign income of all de-
ferred foreign income corporations of such 
United States shareholder. 
‘‘(3) DEFINITIONS
RELATED
TO
E&P
DEFI-
CITS.—For purposes of this subsection— 
‘‘(A) AGGREGATE
FOREIGN
E&P
DEF-
ICIT.—The term ‘aggregate foreign E&P deficit’ 
means, with respect to any United States share-
holder, the aggregate of such shareholder’s pro 
rata shares of the specified E&P deficits of the 
E&P deficit foreign corporations of such share-
holder. 
‘‘(B) E&P DEFICIT
FOREIGN
CORPORA-
TION.—The term ‘E&P deficit foreign corpora-
tion’ means, with respect to any taxpayer, any 
specified foreign corporation with respect to 
which such taxpayer is a United States share-
holder, if— 
‘‘(i) such specified foreign corporation 
has a deficit in post-1986 earnings and 
profits, and 
‘‘(ii) as of December 31, 2016— 
‘‘(I) such corporation was a spec-
ified foreign corporation, and 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
‘‘(II) such taxpayer was a United 
States shareholder of such corpora-
tion. 
‘‘(C) SPECIFIED E&P DEFICIT.—The term 
‘specified E&P deficit’ means, with respect to 
any E&P deficit foreign corporation, the 
amount of the deficit referred to in subpara-
graph (B). 
‘‘(c) REDUCED RATE ON INCLUDED INCOME.—In the 
case of a United States shareholder of a deferred foreign 
income corporation, there shall be allowed as a deduction 
for the taxable year in which an amount is included in 
the gross income of such United States shareholder under 
section 951(a)(1) by reason of this section an amount 
equal to 88.6 percent of the amount so included as gross 
income. 
‘‘(d) DEFERRED FOREIGN INCOME CORPORATION; 
ACCUMULATED
POST-1986 DEFERRED
FOREIGN
IN-
COME.—For purposes of this section— 
‘‘(1) DEFERRED
FOREIGN
INCOME
CORPORA-
TION.—The term ‘deferred foreign income corpora-
tion’ means, with respect to any United States 
shareholder, any specified foreign corporation of 
such United States shareholder which has accumu-
lated post-1986 deferred foreign income (as of the 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
To the extent provided in regulations or other guid-
ance prescribed by the Secretary, in the case of any 
controlled foreign corporation which has share-
holders which are not United States shareholders, 
accumulated post-1986 deferred foreign income shall 
be appropriately reduced by amounts which would be 
described in subparagraph (B)(i) is such share-
holders were United States shareholders. Such regu-
lations or other guidance may provide a similar rule 
for purposes of subparagraph (B)(ii) and (C). 
‘‘(3) POST-1986 EARNINGS AND PROFITS.—The 
term ‘post-1986 earnings and profits’ means the 
earnings and profits of the foreign corporation (com-
puted in accordance with sections 964(a) and 986) 
accumulated in taxable years beginning after Decem-
ber 31, 1986, and determined— 
‘‘(A) as of the close the taxable year re-
ferred to in subsection (a), and 
‘‘(B) without diminution by reason of divi-
dends distributed during such taxable year. 
‘‘(e) SPECIFIED FOREIGN CORPORATION.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, 
the 
term 
‘specified 
foreign 
corporation’ 
means— 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
‘‘(A) any controlled foreign corporation, 
and 
‘‘(B) any section 902 corporation (as de-
fined in section 909(d)(5)). 
‘‘(2) APPLICATION TO SECTION 902 CORPORA-
TIONS.—For purposes of section 951, a section 902 
corporation (as so defined) shall be treated as a con-
trolled foreign corporation solely for purposes of tak-
ing into account the subpart F income of such cor-
poration under subsection (a) (and for purposes of 
applying subsection (f)). 
‘‘(f) DETERMINATIONS OF PRO RATA SHARE.—For 
purposes of this section, the determination of any United 
States shareholder’s pro rata share of any amount with 
respect to any specified foreign corporation shall be deter-
mined under rules similar to the rules of section 951(a)(2) 
by treating such amount in the same manner as subpart 
F income (and by treating such specified foreign corpora-
tion as a controlled foreign corporation). 
‘‘(g) DISALLOWANCE
OF FOREIGN TAX CREDIT, 
ETC.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under section 901 for 88.6 percent of any taxes paid 
or accrued (or treated as paid or accrued) with re-
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
spect to any amount for which a deduction is al-
lowed under this section. 
‘‘(2) DENIAL
OF
DEDUCTION.—No deduction 
shall be allowed under this chapter for any tax for 
which credit is not allowable under section 901 by 
reason of paragraph (1) (determined by treating the 
taxpayer as having elected the benefits of subpart A 
of part III of subchapter N). 
‘‘(3) COORDINATION WITH SECTION 78.—Sec-
tion 78 shall not apply to any tax for which credit 
is not allowable under section 901 by reason of para-
graph (1). 
‘‘(h) ELECTION TO PAY LIABILITY
IN INSTALL-
MENTS.— 
‘‘(1) IN GENERAL.—In the case of a United 
States shareholder of a deferred foreign income cor-
poration, such United States shareholder may elect 
to pay the net tax liability under this section in 8 
installments of the following amounts: 
‘‘(A) 8 percent of the net tax liability in 
the case of each of the first 5 of such install-
ments, 
‘‘(B) 15 percent of the net tax liability in 
the case of the 6th such installment, 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
‘‘(C) 20 percent of the net tax liability in 
the case of the 7th such installment, and 
‘‘(D) 25 percent of the net tax liability in 
the case of the 8th such installment. 
‘‘(2) DATE FOR PAYMENT OF INSTALLMENTS.— 
If an election is made under paragraph (1), the first 
installment shall be paid on the due date (deter-
mined without regard to any extension of time for 
filing the return) for the return of tax for the tax-
able year described in subsection (b) and each suc-
ceeding installment shall be paid on the due date (as 
so determined) for the return of tax for the taxable 
year following the taxable year with respect to which 
the preceding installment was made. 
‘‘(3) ACCELERATION OF PAYMENT.—If there is 
an addition to tax for failure to pay timely assessed 
with respect to any installment required under this 
subsection, a liquidation or sale of substantially all 
the assets of the taxpayer (including in a title 11 or 
similar case), a cessation of business by the tax-
payer, or any similar circumstance, then the unpaid 
portion of all remaining installments shall be due on 
the date of such event (or in the case of a title 11 
or similar case, the day before the petition is filed). 
The preceding sentence shall not apply to the sale 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
of substantially all the assets of a taxpayer to a 
buyer if such buyer enters into an agreement with 
the Secretary under which such buyer is liable for 
the remaining installments due under this subsection 
in the same manner as if such buyer were the tax-
payer. 
‘‘(4) PRORATION OF DEFICIENCY TO INSTALL-
MENTS.—If an election is made under paragraph (1) 
to pay the net tax liability under this section in in-
stallments and a deficiency has been assessed with 
respect to such net tax liability, the deficiency shall 
be prorated to the installments payable under para-
graph (1). The part of the deficiency so prorated to 
any installment the date for payment of which has 
not arrived shall be collected at the same time as, 
and as a part of, such installment. The part of the 
deficiency so prorated to any installment the date 
for payment of which has arrived shall be paid upon 
notice and demand from the Secretary. This sub-
section shall not apply if the deficiency is due to 
negligence, to intentional disregard of rules and reg-
ulations, or to fraud with intent to evade tax. 
‘‘(5) ELECTION.—Any election under paragraph 
(1) shall be made not later than the due date for the 
return of tax for the taxable year described in sub-
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS
section (a) and shall be made in such manner as the 
Secretary may provide. 
‘‘(6) NET
TAX
LIABILITY
UNDER
THIS
SEC-
TION.—For purposes of this subsection— 
‘‘(A) IN GENERAL.—The net tax liability 
under this section with respect to any United 
States shareholder is the excess (if any) of— 
‘‘(i) such taxpayer’s net income tax 
for the taxable year described in subsection 
(a), over 
‘‘(ii) such taxpayer’s net income tax 
for such taxable year determined without 
regard to this section. 
‘‘(B) NET INCOME TAX.—The term ‘net 
income tax’ means the regular tax liability re-
duced by the credits allowed under subparts A, 
B, and D of part IV of subchapter A. 
‘‘(i) SPECIAL RULES FOR S CORPORATION SHARE-
HOLDERS.— 
‘‘(1) IN GENERAL.—In the case of any S cor-
poration which is a United States shareholder of a 
deferred foreign income corporation, each share-
holder of such S corporation may elect to defer pay-
ment of such shareholder’s net tax liability under 
this section with respect to such S corporation until 
VerDate Sep 11 2014 
21:42 Nov 27, 2017
Jkt 079200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H4383.IH
H4383
daltland on DSK30NT082PROD with BILLS