with respect to so much of the taxpayer’s net 
tax liability under this section with respect to 
such S corporation as is properly allocable to 
such stock. 
‘‘(C) TRANSFER OF LIABILITY.—A trans-
fer described in clause (iii) shall not be treated 
as a triggering event if the transferee enters 
into an agreement with the Secretary under 
which such transferee is liable for net tax liabil-
ity with respect to such stock in the same man-
ner as if such transferee were the taxpayer. 
‘‘(3) NET TAX LIABILITY.—A shareholder’s net 
tax liability under this section with respect to any S 
corporation is the net tax liability under this section 
which would be determined under subsection (h)(6) 
if the only subpart F income taken into account by 
such shareholder by reason of this section were allo-
cations from such S corporation. 
‘‘(4) ELECTION TO PAY DEFERRED LIABILITY 
IN INSTALLMENTS.—In the case of a taxpayer which 
elects to defer payment under paragraph (1), sub-
section (h) shall be applied— 
‘‘(A) separately with respect to the liability 
to which such election applies, 
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‘‘(B) an election under subsection (h) with 
respect to such liability shall be treated as time-
ly made if made not later than the due date for 
the return of tax for the taxable year in which 
the triggering event with respect to such liabil-
ity occurs, 
‘‘(C) the first installment under subsection 
(h) with respect to such liability shall be paid 
not later than such due date (but determined 
without regard to any extension of time for fil-
ing the return), and 
‘‘(D) if the triggering event with respect to 
any net tax liability is described in paragraph 
(2)(A)(ii), an election under subsection (h) with 
respect to such liability may be made only with 
the consent of the Secretary. 
‘‘(5) JOINT AND SEVERAL LIABILITY OF S COR-
PORATION.—If any shareholder of an S corporation 
elects to defer payment under paragraph (1), such 
S corporation shall be jointly and severally liable for 
such payment and any penalty, addition to tax, or 
additional amount attributable thereto. 
‘‘(6) EXTENSION OF LIMITATION ON COLLEC-
TION.—Notwithstanding any other provision of law, 
any limitation on the time period for the collection 
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of a liability deferred under this subsection shall not 
be treated as beginning before the date of the trig-
gering event with respect to such liability. 
‘‘(7) 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-
section (a) and shall be made in such manner as the 
Secretary may provide. 
‘‘(j) INCLUSION OF DEFERRED FOREIGN INCOME 
UNDER THIS SECTION NOT TO TRIGGER RECAPTURE OF 
OVERALL
FOREIGN
LOSS.—For purposes of section 
904(f)(1), in the case of a United States shareholder of 
a deferred foreign income corporation, such United States 
shareholder’s taxable income from sources without the 
United States shall be determined without regard to this 
section. 
‘‘(k) 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) CLERICAL AMENDMENT.—The table of section 
for subpart F of part III of subchapter N of chapter 1 
is amended by striking the item relating to section 965 
and inserting the following: 
‘‘Sec. 965. Treatment of deferred foreign income upon transition to participa-
tion exemption system of taxation.’’. 
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SEC. 303. LOOK-THRU RULE FOR RELATED CONTROLLED 
FOREIGN 
CORPORATIONS 
MADE 
PERMA-
NENT. 
(a) IN GENERAL.—Paragraph (6) of section 954(c) 
is amended by striking subparagraph (C). 
(b) 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. 304. REPEAL OF SECTION 902 INDIRECT FOREIGN TAX 
CREDITS; DETERMINATION OF SECTION 960 
CREDIT ON CURRENT YEAR BASIS. 
(a) REPEAL OF SECTION 902 INDIRECT FOREIGN 
TAX CREDITS.—Subpart A of part III of subchapter N 
of chapter 1 is amended by striking section 902. 
(b) DETERMINATION OF SECTION 960 CREDIT ON 
CURRENT YEAR BASIS.—Section 960 is amended— 
(1) by striking subsection (c), by redesignating 
subsection (b) as subsection (c), by striking all that 
precedes subsection (c) (as so redesignated) and in-
serting the following: 
‘‘SEC. 960. DEEMED PAID CREDIT FOR SUBPART F INCLU-
SIONS. 
‘‘(a) IN GENERAL.—For purposes of this subpart, if 
there is included in the gross income of a domestic cor-
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poration any item of income under section 951(a)(1) with 
respect to any controlled foreign corporation with respect 
to which such domestic corporation is a United States 
shareholder, such domestic corporation shall be deemed to 
have paid so much of such foreign corporation’s foreign 
income taxes as are properly attributable to the item of 
income so included. 
‘‘(b) SPECIAL RULES
FOR DISTRIBUTIONS FROM 
PREVIOUSLY TAXED EARNINGS AND PROFITS.—For pur-
poses of this subpart— 
‘‘(1) IN GENERAL.—If any portion of a dis-
tribution from a controlled foreign corporation to a 
domestic corporation which is a United States share-
holder with respect to such controlled foreign cor-
poration is excluded from gross income under section 
959(a), such domestic corporation shall be deemed 
to have paid so much of such foreign corporation’s 
foreign income taxes as— 
‘‘(A) are properly attributable to such por-
tion, and 
‘‘(B) have not been deemed to have to been 
paid by such domestic corporation under this 
section for any prior taxable year. 
‘‘(2) TIERED CONTROLLED FOREIGN CORPORA-
TIONS.—If section 959(b) applies to any portion of 
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a distribution from a controlled foreign corporation 
to another controlled foreign corporation, such con-
trolled foreign corporation shall be deemed to have 
paid so much of such other controlled foreign cor-
poration’s foreign income taxes as— 
‘‘(A) are properly attributable to such por-
tion, and 
‘‘(B) have not been deemed to have been 
paid by a domestic corporation under this sec-
tion for any prior taxable year.’’; 
(2) and by adding after subsection (c) (as so re-
designated) the following new subsections: 
‘‘(d) FOREIGN INCOME TAXES.—The term ‘foreign 
income taxes’ means any income, war profits, or excess 
profits taxes paid or accrued to any foreign country or 
possession of the United States. 
‘‘(e) REGULATIONS.—The Secretary shall provide 
such regulations as may be necessary or appropriate to 
carry out the provisions of this section.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 78 is amended to read as follows: 
‘‘SEC. 78. GROSS UP FOR DEEMED PAID FOREIGN TAX 
CREDIT. 
‘‘If a domestic corporation chooses to have the bene-
fits of subpart A of part III of subchapter N (relating 
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to foreign tax credit) for any taxable year, an amount 
equal to the taxes deemed to be paid by such corporation 
under section 960 (relating to deemed paid credit for sub-
part F inclusions) for such taxable year shall be treated 
for purposes of this title (other than section 960) as an 
item of income required to be included in the gross income 
of such domestic corporation under section 951(a).’’. 
(2) Section 245(a)(10) is amended by striking 
‘‘902,’’. 
(3) Sections 535(b)(1) and 545(b)(1) are each 
amended by striking ‘‘section 902(a) or 960(a)(1)’’ 
and inserting ‘‘section 960’’. 
(4) Paragraph (1) of section 814(f) is amend-
ed— 
(A) by striking subparagraph (B); and 
(B) by striking all that precedes ‘‘No in-
come’’ and inserting the following: 
‘‘(1) TREATMENT OF FOREIGN TAXES.—’’. 
(5) Subparagraph (B) of section 864(h)(1) is 
amended by striking ‘‘902,’’. 
(6) Subsection (a) of section 901 is amended by 
striking ‘‘sections 902 and 960’’ and inserting ‘‘sec-
tion 960’’. 
(7) Paragraph (2) of section 901(e) is amended 
by striking ‘‘but is not limited to—’’ and all that fol-
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lows through ‘‘that portion’’ and inserting ‘‘but is 
not limited to that portion’’. 
(8) Subsection (f) of section 901 is amended by 
striking ‘‘sections 902 and 960’’ and inserting ‘‘sec-
tion 960’’. 
(9) Subparagraph (A) of section 901(j)(1) is 
amended by striking ‘‘902 or’’. 
(10) Subparagraph (B) of section 901(j)(1) is 
amended by striking ‘‘sections 902 and 960’’ and in-
serting ‘‘section 960’’. 
(11) Paragraph (2) of section 901(k) is amend-
ed by striking ‘‘902,’’. 
(12) Paragraph (6) of section 901(k) is amend-
ed by striking ‘‘902 or’’. 
(13) Subparagraph (A) of section 904(h)(10) is 
amended by striking ‘‘sections 902, 907, and 960’’ 
and inserting ‘‘sections 907 and 960’’. 
(14) Section 904 is amended by striking sub-
section (k). 
(15) Paragraph (1) of section 905(c) is amend-
ed by striking the last sentence. 
(16) Subclause (I) of section 905(c)(2)(B)(i) is 
amended by striking ‘‘section 902 or’’. 
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(17) Subsection (a) of section 906 is amended 
by striking ‘‘(or deemed, under section 902, paid or 
accrued during the taxable year)’’. 
(18) Subsection (b) of section 906 is amended 
by striking paragraphs (4) and (5). 
(19) Subparagraph (B) of section 907(b)(2) is 
amended by striking ‘‘902 or’’. 
(20) Paragraph (3) of section 907(c) is amend-
ed— 
(A) by striking subparagraph (A) and re-
designating subparagraphs (B) and (C) as sub-
paragraphs (A) and (B), respectively; and 
(B) by striking ‘‘section 960(a)’’ in sub-
paragraph (A) (as so redesignated) and insert-
ing ‘‘section 960’’. 
(21) Paragraph (5) of section 907(c) is amend-
ed by striking ‘‘902 or’’. 
(22) Clause (i) of section 907(f)(2)(B) is 
amended by striking ‘‘902 or’’. 
(23) Subsection (a) of section 908 is amended 
by striking ‘‘902 or’’. 
(24) Subsection (b) of section 909 is amend-
ed— 
(A) by striking ‘‘section 902 corporation’’ 
in the matter preceding paragraph (1) and in-
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serting ‘‘specified 10-percent owned foreign cor-
poration’’; 
(B) by striking ‘‘902 or’’ in paragraph (1); 
(C) by striking ‘‘by such section 902 cor-
poration’’ and all that follows in the matter fol-
lowing paragraph (2) and inserting ‘‘by such 
specified 10-percent owned foreign corporation 
or a domestic corporation which is a United 
States shareholder with respect to such speci-
fied 10-percent owned foreign corporation.’’; 
and 
(D) by striking ‘‘SECTION 902 CORPORA-
TIONS’’ in the heading thereof and inserting 
‘‘SPECIFIED
10-PERCENT
OWNED
FOREIGN 
CORPORATIONS’’. 
(25) Subsection (d) of section 909 is amended 
by striking paragraph (5). 
(26) Paragraph (1) of section 958(a) is amend-
ed by striking ‘‘960(a)(1)’’ and inserting ‘‘960’’. 
(27) Subsection (d) of section 959 is amended 
by striking ‘‘Except as provided in section 960(a)(3), 
any’’ and inserting ‘‘Any’’. 
(28) Subsection (e) of section 959 is amended 
by striking ‘‘and section 960(b)’’. 
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(29) Subparagraph (A) of section 1291(g)(2) is 
amended by striking ‘‘any distribution—’’ and all 
that follows through ‘‘but only if’’ and inserting 
‘‘any distribution, any withholding tax imposed with 
respect to such distribution, but only if’’. 
(30) Section 1293 is amended by striking sub-
section (f). 
(31) Subparagraph (B) of section 6038(c)(1) is 
amended by striking ‘‘sections 902 (relating to for-
eign tax credit for corporate stockholder in foreign 
corporation) and 960 (relating to special rules for 
foreign tax credit)’’ and inserting ‘‘section 960’’. 
(32) Paragraph (4) of section 6038(c) is 
amended by striking subparagraph (C). 
(33) The table of sections for subpart A of part 
III of subchapter N of chapter 1 is amended by 
striking the item relating to section 902. 
(34) The table of sections for subpart F of part 
III of subchapter N of chapter 1 is amended by 
striking the item relating to section 960 and insert-
ing the following: 
‘‘Sec. 960. Deemed paid credit for subpart F inclusions.’’. 
(d) 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 
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years of United States shareholders in which or with which 
such taxable years of foreign corporations end. 
TITLE IV—REDUCED RATES FOR 
INDIVIDUALS 
SEC. 401. REDUCED RATES FOR INDIVIDUALS. 
(a) JOINT RETURNS AND SURVIVING SPOUSES.— 
Section 1(a) is amended by striking ‘‘in accordance with 
the following table’’ and all that follows and inserting ‘‘as 
follows: 12 percent of so much of taxable income as does 
not exceed $75,300, plus 25 percent of so much of taxable 
income as exceeds $75,300 but does not exceed $466,950, 
plus 29 percent of so much of taxable income as exceeds 
$466,950.’’. 
(b) HEADS
OF
HOUSEHOLDS.—Section 1(b) is 
amended by striking ‘‘in accordance with the following 
table’’ and all that follows and inserting ‘‘as follows: 12 
percent of so much of taxable income as does not exceed 
$50,400, plus 25 percent of so much of taxable income 
as exceeds $50,400 but does not exceed $441,000, plus 
29 percent of so much of taxable income as exceeds 
$441,000.’’. 
(c) SINGLE.—Section 1(c) is amended by striking ‘‘in 
accordance with the following table’’ and all that follows 
and inserting ‘‘as follows: 12 percent of so much of taxable 
income as does not exceed $37,650, plus 25 percent of 
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plied by substituting ‘2016’ for ‘1992’ in subpara-
graph (B) thereof.’’. 
(g) REPEAL OF MODIFICATIONS TO SUPERCEDED 
RATES.—Section 1 is amended by striking subsection (i) 
and by redesignating subsection (j) (as added by section 
202) as subsection (i). 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2016. 
TITLE V—TAX-EXEMPT 
REORGANIZATIONS 
SEC. 501. NO TAXABLE EVENT FOR CHANGE OF COR-
PORATE FORM. 
Notwithstanding any provision of the Internal Rev-
enue Code of 1986, a change in the organizational struc-
ture of a corporation, however organized, into another or-
ganizational structure is not a taxable event for the pur-
poses of such Code if there is no change among the own-
ers, their ownership interests, or the assets of the organi-
zation (other than a de minimus change in such assets). 
The preceding sentence shall apply to changes in organiza-
tional structure occurring after December 31, 2016. 
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TITLE VI—REPEAL OF NET 
INVESTMENT INCOME TAX 
SEC. 601. REPEAL OF NET INVESTMENT INCOME TAX. 
(a) IN GENERAL.—Subtitle A of the Internal Rev-
enue Code of 1986 is amended by striking chapter 2A. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2016. 
TITLE VII—REPEAL OF ESTATE 
TAX 
SEC. 701. REPEAL OF ESTATE TAX AND RETENTION OF 
BASIS STEP-UP. 
Effective for estates of decedents dying after Decem-
ber 31, 2016, chapter 11 of the Internal Revenue Code 
of 1986 is repealed. 
Æ 
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