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131 STAT. 2193 PUBLIC LAW 115–97—DEC. 22, 2017 (1) IN GENERAL.—Section 964(e) is amended by adding at the end the following new paragraph: ‘‘(4) COORDINATION WITH DIVIDENDS RECEIVED DEDUC- TION.— ‘‘(A) IN GENERAL.—If, for any taxable year of a con- trolled foreign corporation beginning after December 31, 2017, any amount is treated as a dividend under paragraph (1) by reason of a sale or exchange by the controlled foreign corporation of stock in another foreign corporation held for 1 year or more, then, notwithstanding any other provi- sion of this title— ‘‘(i) the foreign-source portion of such dividend shall be treated for purposes of section 951(a)(1)(A) as subpart F income of the selling controlled foreign corporation for such taxable year, ‘‘(ii) a United States shareholder with respect to the selling controlled foreign corporation shall include in gross income for the taxable year of the shareholder with or within which such taxable year of the controlled foreign corporation ends an amount equal to the share- holder’s pro rata share (determined in the same manner as under section 951(a)(2)) of the amount treated as subpart F income under clause (i), and ‘‘(iii) the deduction under section 245A(a) shall be allowable to the United States shareholder with respect to the subpart F income included in gross income under clause (ii) in the same manner as if such subpart F income were a dividend received by the shareholder from the selling controlled foreign cor- poration. ‘‘(B) APPLICATION OF BASIS OR SIMILAR ADJUSTMENT.— For purposes of this title, in the case of a sale or exchange by a controlled foreign corporation of stock in another for- eign corporation in a taxable year of the selling controlled foreign corporation beginning after December 31, 2017, rules similar to the rules of section 961(d) shall apply. ‘‘(C) FOREIGN-SOURCE PORTION.—For purposes of this paragraph, the foreign-source portion of any amount treated as a dividend under paragraph (1) shall be deter- mined in the same manner as under section 245A(c).’’. (2) EFFECTIVE DATE.—The amendments made by this sub- section shall apply to sales or exchanges after December 31, 2017. (d) TREATMENT OF FOREIGN BRANCH LOSSES TRANSFERRED TO SPECIFIED 10-PERCENT OWNED FOREIGN CORPORATIONS.— (1) IN GENERAL.—Part II of subchapter B of chapter 1 is amended by adding at the end the following new section: ‘‘SEC. 91. CERTAIN FOREIGN BRANCH LOSSES TRANSFERRED TO SPECIFIED 10-PERCENT OWNED FOREIGN CORPORATIONS. ‘‘(a) IN GENERAL.—If a domestic corporation transfers substan- tially all of the assets of a foreign branch (within the meaning of section 367(a)(3)(C), as in effect before the date of the enactment of the Tax Cuts and Jobs Act) to a specified 10-percent owned foreign corporation (as defined in section 245A) with respect to which it is a United States shareholder after such transfer, such domestic corporation shall include in gross income for the taxable 26 USC 91. 26 USC 964 note. 26 USC 964. VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00141 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS