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131 STAT. 2206 PUBLIC LAW 115–97—DEC. 22, 2017 ‘‘(3) SURROGATE FOREIGN CORPORATION.—For purposes of this subsection, the term ‘surrogate foreign corporation’ has the meaning given such term in section 7874(a)(2)(B). ‘‘(m) SPECIAL RULES FOR UNITED STATES SHAREHOLDERS WHICH ARE REAL ESTATE INVESTMENT TRUSTS.— ‘‘(1) IN GENERAL.—If a real estate investment trust is a United States shareholder in 1 or more deferred foreign income corporations— ‘‘(A) any amount required to be taken into account under section 951(a)(1) by reason of this section shall not be taken into account as gross income of the real estate investment trust for purposes of applying paragraphs (2) and (3) of section 856(c) to any taxable year for which such amount is taken into account under section 951(a)(1), and ‘‘(B) if the real estate investment trust elects the application of this subparagraph, notwithstanding sub- section (a), any amount required to be taken into account under section 951(a)(1) by reason of this section shall, in lieu of the taxable year in which it would otherwise be included in gross income (for purposes of the computa- tion of real estate investment trust taxable income under section 857(b)), be included in gross income as follows: ‘‘(i) 8 percent of such amount in the case of each of the taxable years in the 5-taxable year period begin- ning with the taxable year in which such amount would otherwise be included. ‘‘(ii) 15 percent of such amount in the case of the 1st taxable year following such period. ‘‘(iii) 20 percent of such amount in the case of the 2nd taxable year following such period. ‘‘(iv) 25 percent of such amount in the case of the 3rd taxable year following such period. ‘‘(2) RULES FOR TRUSTS ELECTING DEFERRED INCLUSION.— ‘‘(A) ELECTION.—Any election under paragraph (1)(B) shall be made not later than the due date for the first taxable year in the 5-taxable year period described in clause (i) of paragraph (1)(B) and shall be made in such manner as the Secretary shall provide. ‘‘(B) SPECIAL RULES.—If an election under paragraph (1)(B) is in effect with respect to any real estate investment trust, the following rules shall apply: ‘‘(i) APPLICATION OF PARTICIPATION EXEMPTION.— For purposes of subsection (c)(1)— ‘‘(I) the aggregate amount to which subpara- graph (A) or (B) of subsection (c)(1) applies shall be determined without regard to the election, ‘‘(II) each such aggregate amount shall be allo- cated to each taxable year described in paragraph (1)(B) in the same proportion as the amount included in the gross income of such United States shareholder under section 951(a)(1) by reason of this section is allocated to each such taxable year. ‘‘(III) NO INSTALLMENT PAYMENTS.—The real estate investment trust may not make an election under subsection (g) for any taxable year described in paragraph (1)(B). VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00154 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS