I 
117TH CONGRESS 
1ST SESSION H. R. 2031 
To amend the Internal Revenue Code of 1986 to encourage the transfer 
of intangible property from controlled foreign corporations to United 
States shareholders. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 18, 2021 
Mr. LAHOOD (for himself and Mr. FERGUSON) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to encourage 
the transfer of intangible property from controlled for-
eign corporations to United States shareholders. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SPECIAL RULES FOR TRANSFERS OF INTAN-
GIBLE PROPERTY FROM CONTROLLED FOR-
EIGN CORPORATIONS TO UNITED STATES 
SHAREHOLDERS. 
(a) IN GENERAL.—Subpart F of part III of sub-
chapter N of chapter 1 of the Internal Revenue Code of 
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1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 966. TRANSFERS OF INTANGIBLE PROPERTY TO 
UNITED STATES SHAREHOLDERS. 
‘‘(a) IN GENERAL.—If a controlled foreign corpora-
tion holds intangible property on the date of the enact-
ment of this section and thereafter distributes such prop-
erty to a domestic corporation which is a United States 
shareholder with respect to such controlled foreign cor-
poration— 
‘‘(1) for purposes of part I of subchapter C and 
any other provision of this title specified by the Sec-
retary, the fair market value of such property on the 
date of such distribution shall be treated as not ex-
ceeding the adjusted basis of such property imme-
diately before such distribution, and 
‘‘(2) if any portion of such distribution is not 
a dividend— 
‘‘(A) no gain shall be recognized by such 
United States shareholder with respect to such 
distribution, and 
‘‘(B) the adjusted basis of such property in 
the hands of such United States shareholder 
immediately after such distribution shall be the 
adjusted basis of such property in the hands of 
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such controlled foreign corporation immediately 
before such distribution reduced by the amount 
(if any) of gain not recognized by reason of 
subparagraph (A) (determined after the appli-
cation of paragraph (1)). 
‘‘(b) INTANGIBLE PROPERTY.—For purposes of this 
section, the term ‘intangible property’ means any— 
‘‘(1) patent, copyright, license, invention, for-
mula, process, design, pattern, know-how, or format, 
‘‘(2) method, program, system, procedure, cam-
paign, survey, study, forecast, estimate, or technical 
data, 
‘‘(3) computer software (as defined in section 
197(e)(3)(B)), or 
‘‘(4) any similar item, which has substantial 
value independent of the services of any individual.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 197(f)(2)(B)(i) of such Code is 
amended by inserting ‘‘966(a),’’ after ‘‘731,’’. 
(2) The table of sections for subpart F of part 
III of subchapter N of chapter 1 of such Code is 
amended by adding at the end the following new 
item: 
‘‘Sec. 966. Transfers of intangible property to United States shareholders.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions made in taxable 
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years of foreign corporations beginning after December 
31, 2021, and to taxable years of United States share-
holders in which or with which such taxable years of for-
eign corporations end. 
Æ 
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