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136 STAT. 1830 PUBLIC LAW 117–169—AUG. 16, 2022 ‘‘(A) such specified affiliate shall be treated as a covered corporation with respect to such acquisition, ‘‘(B) such acquisition shall be treated as a repurchase of stock of a covered corporation by such covered corpora- tion, and ‘‘(C) the adjustment under subsection (c)(3) shall be determined only with respect to stock issued or provided by such specified affiliate to employees of the specified affiliate. ‘‘(2) SURROGATE FOREIGN CORPORATIONS.—In the case of a repurchase of stock of a covered surrogate foreign corporation by such covered surrogate foreign corporation, or an acquisition of stock of a covered surrogate foreign corporation by a specified affiliate of such corporation, for purposes of this section— ‘‘(A) the expatriated entity with respect to such covered surrogate foreign corporation shall be treated as a covered corporation with respect to such repurchase or acquisition, ‘‘(B) such repurchase or acquisition shall be treated as a repurchase of stock of a covered corporation by such covered corporation, and ‘‘(C) the adjustment under subsection (c)(3) shall be determined only with respect to stock issued or provided by such expatriated entity to employees of the expatriated entity. ‘‘(3) DEFINITIONS.—For purposes of this subsection— ‘‘(A) APPLICABLE FOREIGN CORPORATION.—The term ‘applicable foreign corporation’ means any foreign corpora- tion the stock of which is traded on an established securi- ties market (within the meaning of section 7704(b)(1)). ‘‘(B) COVERED SURROGATE FOREIGN CORPORATION.—The term ‘covered surrogate foreign corporation’ means any surrogate foreign corporation (as determined under section 7874(a)(2)(B) by substituting ‘September 20, 2021’ for ‘March 4, 2003’ each place it appears) the stock of which is traded on an established securities market (within the meaning of section 7704(b)(1)), but only with respect to taxable years which include any portion of the applicable period with respect to such corporation under section 7874(d)(1). ‘‘(C) EXPATRIATED ENTITY.—The term ‘expatriated entity’ has the meaning given such term by section 7874(a)(2)(A). ‘‘(e) EXCEPTIONS.—Subsection (a) shall not apply— ‘‘(1) to the extent that the repurchase is part of a reorga- nization (within the meaning of section 368(a)) and no gain or loss is recognized on such repurchase by the shareholder under chapter 1 by reason of such reorganization, ‘‘(2) in any case in which the stock repurchased is, or an amount of stock equal to the value of the stock repurchased is, contributed to an employer-sponsored retirement plan, employee stock ownership plan, or similar plan, ‘‘(3) in any case in which the total value of the stock repurchased during the taxable year does not exceed $1,000,000, ‘‘(4) under regulations prescribed by the Secretary, in cases in which the repurchase is by a dealer in securities in the ordinary course of business, VerDate Sep 11 2014 13:57 Oct 25, 2022 Jkt 029139 PO 00169 Frm 00014 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL169.117 PUBL169 jmbennett on LAP3P8D0R2PROD with Publaw