‘‘(4) Subparagraphs (A), (B), and (C) of sec-
tion 318(a)(3) shall not be applied so as to consider 
a United States person as owning stock which is 
owned by a person who is not a United States per-
son.’’, and 
(2) by striking ‘‘Paragraph (1)’’ in the last sen-
tence and inserting ‘‘Paragraphs (1) and (4)’’. 
(b) FOREIGN CONTROLLED UNITED STATES SHARE-
HOLDERS.—Subpart F of part III of subchapter N of 
chapter 1 of such Code is amended by inserting after sec-
tion 951A the following new section: 
‘‘SEC. 951B. AMOUNTS INCLUDED IN GROSS INCOME OF 
FOREIGN 
CONTROLLED 
UNITED 
STATES 
SHAREHOLDERS. 
‘‘(a) IN GENERAL.—In the case of any foreign con-
trolled United States shareholder of a foreign controlled 
foreign corporation— 
‘‘(1) this subpart (other than sections 951A, 
951(b), and 957) shall be applied with respect to 
such shareholder (separately from, and in addition 
to, the application of this subpart without regard to 
this section)— 
‘‘(A) by substituting ‘foreign controlled 
United States shareholder’ for ‘United States 
shareholder’ each place it appears therein, and 
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‘‘(B) by substituting ‘foreign controlled 
foreign corporation’ for ‘controlled foreign cor-
poration’ each place it appears therein, and 
‘‘(2) section 951A shall be applied with respect 
to such shareholder— 
‘‘(A) by treating each reference to ‘United 
States shareholder’ in such section as including 
a reference to such shareholder, and 
‘‘(B) by treating each reference to ‘con-
trolled foreign corporation’ in such section as 
including a reference to such foreign controlled 
foreign corporation. 
‘‘(b) 
FOREIGN
CONTROLLED
UNITED
STATES 
SHAREHOLDER.—For purposes of this section, the term 
‘foreign controlled United States shareholder’ means, with 
respect to any foreign corporation, any United States per-
son which would be a United States shareholder with re-
spect to such foreign corporation if— 
‘‘(1) section 951(b) were applied by substituting 
‘more than 50 percent’ for ‘10 percent or more’, and 
‘‘(2) section 958(b) were applied without regard 
to paragraph (4) thereof. 
‘‘(c) FOREIGN CONTROLLED FOREIGN CORPORA-
TION.—For purposes of this section, the term ‘foreign con-
trolled foreign corporation’ means a foreign corporation, 
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other than a controlled foreign corporation, which would 
be a controlled foreign corporation if section 957(a) were 
applied— 
‘‘(1) by substituting ‘foreign controlled United 
States shareholders’ for ‘United States share-
holders’, and 
‘‘(2) by substituting ‘section 958(b) (other than 
paragraph (4) thereof)’ for ‘section 958(b)’. 
‘‘(d) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary 
or appropriate to carry out the purposes of this section, 
including regulations or other guidance— 
‘‘(1) to treat a foreign controlled United States 
shareholder or a foreign controlled foreign corpora-
tion as a United States shareholder or as a con-
trolled foreign corporation, respectively, for purposes 
of provisions of this title other than this subpart, 
and 
‘‘(2) to prevent the avoidance of the purposes of 
this section.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart F of part III of subchapter N of chapter 1 
is amended by inserting after the item relating to section 
951A the following new item: 
‘‘Sec. 951B. Amounts included in gross income of foreign controlled United 
States shareholders.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to— 
(1) the last taxable year of foreign corporations 
beginning before January 1, 2025, and each subse-
quent taxable year of such foreign corporations, and 
(2) taxable years of United States persons in 
which or with which such taxable years of foreign 
corporations end. 
(e) NO INFERENCE.—The amendments made by this 
section shall not be construed to create any inference with 
respect to the proper application of any provision of the 
Internal Revenue Code of 1986 with respect to taxable 
years beginning before the taxable years to which such 
amendments apply. 
Æ 
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