1995, and to taxable years of United States share-
holders in which or with which such taxable years of
foreign corporations end.
SEC. 3. TRANSFER PRICING.
(a) AUTHORITY OF SECRETARY WHEN LEGAL LIM-
ITS ON TRANSFER BY TAXPAYER.—Section 482 of the In-
ternal Revenue Code of 1986 (relating to allocation of in-
come and deductions among taxpayers) is amended by
adding at the end the following: ‘‘The authority of the Sec-
retary under this section shall not be limited by any re-
striction (by any law or agreement) on the ability of such
interests, organizations, trades, or businesses to transfer
or receive money or other property.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 1995.
SEC. 4. ELIMINATION OF EXCLUSION FOR CITIZENS OR
RESIDENTS 
OF 
UNITED 
STATES 
LIVING
ABROAD.
Section 911 of the Internal Revenue Code of 1986
(relating to citizens or residents of the United States living
abroad) is amended by redesignating subsection (f) as sub-
section (g) and by inserting after subsection (e) the follow-
ing new subsection:
‘‘(f) TERMINATION.—This section shall not apply to
any taxable year beginning after December 31, 1995.’’
SEC. 5. DISPOSITION OF STOCK IN DOMESTIC CORPO-
RATIONS BY 10-PERCENT FOREIGN SHARE-
HOLDERS.
(a) GENERAL RULE.—Subpart D of part II of sub-
chapter N of chapter 1 of the Internal Revenue Code of
1986 (relating to miscellaneous provisions) is amended by
adding at the end thereof the following new section:
‘‘SEC. 899. DISPOSITION OF STOCK IN DOMESTIC CORPO-
RATIONS BY 10-PERCENT FOREIGN SHARE-
HOLDERS.
‘‘(a) GENERAL RULE.—
‘‘(1) TREATMENT AS EFFECTIVELY CONNECTED
WITH UNITED STATES TRADE OR BUSINESS.—For
purposes of this title, if any nonresident alien indi-
vidual or foreign corporation is a 10-percent share-
holder in any domestic corporation, any gain or loss
of such individual or foreign corporation from the
disposition of any stock in such domestic corporation
shall be taken into account—
‘‘(A) in the case of a nonresident alien in-
dividual, under section 871(b)(1), or
‘‘(B) in the case of a foreign corporation,
under section 882(a)(1),
as if the taxpayer were engaged during the taxable
year in a trade or business within the United States
through a permanent establishment in the United
States and as if such gain or loss were effectively
connected with such trade or business and attrib-
utable to such permanent establishment. Notwith-
standing section 865, any such gain or loss shall be
treated as from sources in the United States.
‘‘(2) 26-PERCENT
MINIMUM
TAX
ON
NON-
RESIDENT ALIEN INDIVIDUALS.—
‘‘(A) IN
GENERAL.—In the case of any
nonresident alien individual, the amount deter-
mined under section 55(b)(1)(A) shall not be
less than 26 percent of the lesser of—
‘‘(i) the individual’s alternative mini-
mum taxable income (as defined in section
55(b)(2)) for the taxable year, or
‘‘(ii) the individual’s net taxable stock
gain for the taxable year.
‘‘(B) NET
TAXABLE
STOCK
GAIN.—For
purposes of subparagraph (A), the term ‘net
taxable stock gain’ means the excess of—
‘‘(i) the aggregate gains for the tax-
able year from dispositions of stock in do-
mestic corporations with respect to which