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131 STAT. 2225 PUBLIC LAW 115–97—DEC. 22, 2017 (38) 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. (39) 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 inserting 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 corporations beginning after December 31, 2017, and to taxable years of United States share- holders in which or with which such taxable years of foreign corpora- tions end. SEC. 14302. SEPARATE FOREIGN TAX CREDIT LIMITATION BASKET FOR FOREIGN BRANCH INCOME. (a) IN GENERAL.—Section 904(d)(1), as amended by section 14201, is amended by redesignating subparagraphs (B) and (C) as subparagraphs (C) and (D), respectively, and by inserting after subparagraph (A) the following new subparagraph: ‘‘(B) foreign branch income,’’. (b) FOREIGN BRANCH INCOME.— (1) IN GENERAL.—Section 904(d)(2) is amended by inserting after subparagraph (I) the following new subparagraph: ‘‘(J) FOREIGN BRANCH INCOME.— ‘‘(i) IN GENERAL.—The term ‘foreign branch income’ means the business profits of such United States per- son which are attributable to 1 or more qualified busi- ness units (as defined in section 989(a)) in 1 or more foreign countries. For purposes of the preceding sen- tence, the amount of business profits attributable to a qualified business unit shall be determined under rules established by the Secretary. ‘‘(ii) EXCEPTION.—Such term shall not include any income which is passive category income.’’. (2) CONFORMING AMENDMENT.—Section 904(d)(2)(A)(ii), as amended by section 14201, is amended by striking ‘‘income described in paragraph (1)(A) and’’ and inserting ‘‘income described in paragraph (1)(A), foreign branch income, and’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2017. SEC. 14303. SOURCE OF INCOME FROM SALES OF INVENTORY DETER- MINED SOLELY ON BASIS OF PRODUCTION ACTIVITIES. (a) IN GENERAL.—Section 863(b) is amended by adding at the end the following: ‘‘Gains, profits, and income from the sale or exchange of inventory property described in paragraph (2) shall be allocated and apportioned between sources within and without the United States solely on the basis of the production activities with respect to the property.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable years beginning after December 31, 2017. SEC. 14304. ELECTION TO INCREASE PERCENTAGE OF DOMESTIC TAX- ABLE INCOME OFFSET BY OVERALL DOMESTIC LOSS TREATED AS FOREIGN SOURCE. (a) IN GENERAL.—Section 904(g) is amended by adding at the end the following new paragraph: 26 USC 863 note. 26 USC 904 note. 26 USC 904. 26 USC 78 note. 26 USC 951 prec. 26 USC 901 prec. VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00173 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS