Source: http://taxtv.com/code/00793-USCODE-2011-title26-subtitleA-chap1-subchapP-partVI-subpartD-sec1298/
Timestamp: 2017-11-24 04:02:43
Document Index: 137076058

Matched Legal Cases: ['§1298', '§1298', '§1298', '§1235', '§1297', '§1012', '§7811', '§13231', '§1501', '§1298', '§1122', '§6011', '§11', '§521', '§413', '§11', '§1122', '§11', '§11', '§1122', '§1122', '§1501', '§1703', '§1703', '§1501', '§1703', '§1501', '§13231', '§7811', '§7811', '§7811', '§1012', '§1012', '§1012', '§1012', '§1012', '§1012']

IRC §1298. Special rules - TaxTV.com
IRC §1298. Special rules
View related content: IRC §1298
(2) Certain corporations not treated as PFIC’s during start-up year
A corporation shall not be treated as a passive foreign investment company for any taxable year if—
(B) it is established to the satisfaction of the Secretary that—
Under regulations, in any case in which a United States person is treated as owning stock in a passive foreign investment company by reason of subsection (a)—
Rules similar to the rules of section 959(b) shall apply to any amount described in subparagraph (A) and to any amount included in gross income under section 1293(a) (or which would have been so included but for section 9 (f)) 1 in respect of stock which the taxpayer is treated as owning under subsection (a).
For purposes of subparagraph (A), the term “qualified stock” means any stock in a C corporation which is a domestic corporation and which is not a regulated investment company or real estate investment trust.
Any amount included in gross income under section 9 (a)(1)(B) shall be treated as a distribution received with respect to the stock.
If stock in a passive foreign investment company is owned (or treated as owned under subsection (a)) by a pooled income fund (as defined in section 642(c)(5)) and no portion of any gain from a disposition of such stock may be allocated to income under the terms of the governing instrument of such fund—
The amount taken into account under section 1296(a)(2) 1 with respect to any asset to which paragraph (1) applies shall be the unamortized portion (as determined under regulations prescribed by the Secretary) of the present value of the payments under the lease for the use of such property.
For purposes of subparagraph (A), the present value of payments described in subparagraph (A) shall be determined in the manner provided in regulations prescribed by the Secretary—
(ii) except as provided in such regulations, by using a discount rate equal to the applicable Federal rate determined under section 1274(d)—
This subsection shall not apply in any case where—
In the case of any intangible property (as defined in section 936(h)(3)(B)) with respect to which a controlled foreign corporation is a licensee and which is used by such foreign corporation in the active conduct of a trade or business, the adjusted basis of the total assets of such foreign corporation shall be increased by an amount equal to 300 percent of the payments made during the taxable year by such foreign corporation for the use of such intangible property.
(ii) any payments under a license if a principal purpose of entering into such license was to avoid the provisons 2 of this part.
For purposes of this subsection, the term “controlled foreign corporation” has the meaning given such term by section 957(a).
(Added Pub. L. 99– 4, title XII, §1235(a), Oct. 22, 1986, 100 Stat. 2573, §1297; amended Pub. L. 100–647, title I, §1012(p)(10), (17), (20), (22), (24), (35), (36), Nov. 10, 1988, 102 Stat. 3 7–3 9, 3522; Pub. L. 101–239, title VII, §7811(i)(4), Dec. 19, 1989, 103 Stat. 2410; Pub. L. 103–66, title XIII, §13231(d)(2), (4), Aug. 10, 1993, 107 Stat. 499; Pub. L. 104–188, title I, §§1501(b)(10), (11), 1703(i)(5), (6), Aug. 20, 1996, 110 Stat. 1826, 1876; renumbered §1298 and amended Pub. L. 105–34, title XI, §1122(a), (e), Aug. 5, 1997, 111 Stat. 972, 977; Pub. L. 105–206, title VI, §6011(b)(2), July 22, 1998, 112 Stat. 818; Pub. L. 110–172, §11(a)(24)(C), (f)(2), Dec. 29, 2007, 121 Stat. 2487, 2489; Pub. L. 111–147, title V, §521(a), Mar. 18, 2010, 124 Stat. 112.)
Section 9 (f), referred to in subsec. (b)(5)(B), was redesignated section 9 (d) by Pub. L. 108–357, title IV, §413(c)(16), Oct. 22, 2004, 118 Stat. 1508, and subsequently was redesignated section 9 (c) by Pub. L. 110–172, §11(g)(13), Dec. 29, 2007, 121 Stat. 2490.
Section 1296, referred to in subsec. (d)(2)(A), was renumbered section 1297 and a new section 1296 was added by Pub. L. 105–34, title XI, §1122(a), Aug. 5, 1997, 111 Stat. 972.
2010—Subsecs. (f), (g). Pub. L. 111–147 added subsec. (f) and redesignated former subsec. (f) as (g).
2007—Subsec. (a)(2)(B). Pub. L. 110–172, §11(a)(24)(C), substituted “Section 1297(d)” for “Section 1297(e)”.
Subsec. (b)(7) to (9). Pub. L. 110–172, §11(f)(2), redesignated pars. (8) and (9) as (7) and (8), respectively, and struck out former par. (7) which read as follows: “Section 1246 shall not apply to earnings and profits of any company for any taxable year beginning after December 31, 1986, if such company is a passive foreign investment company for such taxable year.”
1998—Subsec. (a)(2)(B). Pub. L. 105–206 inserted at end “Section 1297(e) shall not apply in determining whether a corporation is a passive foreign investment company for purposes of this subparagraph.”
1997—Pub. L. 105–34, §1122(a), renumbered section 1297 of this title as this section.
Subsec. (b)(1). Pub. L. 105–34, §1122(e), inserted “(determined without regard to the preceding sentence)” after “investment company” in last sentence.
1996—Subsec. (b)(9). Pub. L. 104–188, §1501(b)(10), substituted “section 9 (a)(1)(B)” for “subparagraph (B) or (C) of section 9 (a)(1)”.
Subsec. (d)(2). Pub. L. 104–188, §1703(i)(5)(B), in heading substituted “Amount taken into account” for “Determination of adjusted basis”.
Subsec. (d)(2)(A). Pub. L. 104–188, §1703(i)(5)(A), substituted “The amount taken into account under section 1296(a)(2) with respect to any asset” for “The adjusted basis of any asset”.
Subsec. (d)(3)(B). Pub. L. 104–188, §1501(b)(11), struck out “or section 956A” after “this part”.
Subsec. (e). Pub. L. 104–188, §1703(i)(6), inserted “For purposes of this part—” after heading.
Subsec. (e)(2)(B)(ii). Pub. L. 104–188, §1501(b)(11), struck out “or section 956A” after “this part”.
1993—Subsec. (b)(9). Pub. L. 103–66, §13231(d)(2), added par. (9).
1989—Subsec. (b)(5). Pub. L. 101–239, §7811(i)(4)(A), substituted “where stock held” for “where held” in heading.
Subsec. (b)(5)(A). Pub. L. 101–239, §7811(i)(4)(C), substituted “treated as a disposition by, or distribution to” for “treated as a disposition to” in concluding provisions.
Subsec. (b)(5)(A)(ii). Pub. L. 101–239, §7811(i)(4)(B), substituted “any distribution of” for “any disposition of”.
1988—Subsec. (a)(4). Pub. L. 100–647, §1012(p)(10)(A), added par. (4). Former par. (4) redesignated (5).
Subsec. (a)(5). Pub. L. 100–647, §1012(p)(10), redesignated par. (4) as (5) and substituted “paragraph (2), (3), or (4)” for “paragraph (2) or (3)”.
Subsec. (b)(1). Pub. L. 100–647, §1012(p)(36), substituted “investment company which” for “investment corporation which”.
Subsec. (b)(3)(A). Pub. L. 100–647, §1012(p)(22), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “such corporation (and any predecessor) was not a passive foreign investment corporation for any prior taxable year,”.
Subsec. (b)(5). Pub. L. 100–647, §1012(p)(17), substituted “part where held” for “section where stock held” in heading, and amended text generally. Prior to amendment, text read as follows: “Under regulations, in any case in which a United States person is treated as holding stock in a passive foreign investment company by reason of subsection (a), any disposition by the United States person or the person holding such stock which results in the United States person being treated as no longer holding such stock, shall be treated as a disposition by the United States person with respect to stock in the passive foreign investment company.”
Subsec. (b)(6). Pub. L. 100–647, §1012(p)(20), substituted “Except as provided in regulations, if a” for “If a”.