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139 STAT. 204 PUBLIC LAW 119–21—JULY 4, 2025 ‘‘(iii) to which the third sentence of section 863(b) applies, and ‘‘(B) is attributable (determined under rules similar to the rules of section 864(c)(5)) to such office or other fixed place of business, shall be treated as from sources without the United States, except that the amount so treated shall not exceed 50 percent of the income from the sale or exchange of such inventory property.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable years beginning after December 31, 2025. PART II—FOREIGN-DERIVED DEDUCTION ELI- GIBLE INCOME AND NET CFC TESTED IN- COME SEC. 70321. MODIFICATION OF DEDUCTION FOR FOREIGN-DERIVED DEDUCTION ELIGIBLE INCOME AND NET CFC TESTED INCOME. (a) IN GENERAL.—Section 250(a) is amended— (1) by striking ‘‘37.5 percent’’ in paragraph (1)(A) and inserting ‘‘33.34 percent’’, (2) by striking ‘‘50 percent’’ in paragraph (1)(B) and inserting ‘‘40 percent’’, and (3) by striking paragraph (3). (b) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2025. SEC. 70322. DETERMINATION OF DEDUCTION ELIGIBLE INCOME. (a) SALES OR OTHER DISPOSITIONS OF CERTAIN PROPERTY.— (1) IN GENERAL.—Section 250(b)(3)(A)(i) is amended— (A) by striking ‘‘and’’ at the end of subclause (V), (B) by striking ‘‘over’’ at the end of subclause (VI) and inserting ‘‘and’’, and (C) by adding at the end the following new subclause: ‘‘(VII) except as otherwise provided by the Sec- retary, any income and gain from the sale or other disposition (including pursuant to the deemed sale or other deemed disposition or a transaction sub- ject to section 367(d)) of— ‘‘(aa) intangible property (as defined in section 367(d)(4)), and ‘‘(bb) any other property of a type that is subject to depreciation, amortization, or depletion by the seller, over’’. (2) CONFORMING AMENDMENT.—Section 250(b)(5)(E) is amended by inserting ‘‘(other than paragraph (3)(A)(i)(VII))’’ after ‘‘For purposes of this subsection’’. (3) EFFECTIVE DATE.—The amendments made by this sub- section shall apply to sales or other dispositions (including pursuant to deemed sales or other deemed dispositions or a transaction subject to section 367(d) of the Internal Revenue Code of 1986) occurring after June 16, 2025. (b) EXPENSE APPORTIONMENT LIMITED TO PROPERLY ALLOCABLE EXPENSES.— 26 USC 250 note. 26 USC 250 note. 26 USC 904 note.