To amend the Internal Revenue Code of 1986 to clarify the treatment for foreign tax credit limitation purposes of certain transfers of intangible property.

March 6, 2003

Mr. SHAW (for himself and Mr. FOLEY) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to clarify the treatment for foreign tax credit limitation purposes of certain transfers of intangible property.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. CLARIFICATION OF TREATMENT OF CERTAIN TRANSFERS OF INTANGIBLE PROPERTY.

(a) IN GENERAL- Subparagraph (C) of section 367(d)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: `For purposes of applying the foreign tax credit limitation categories of section 904(d), any such amount shall be treated in the same manner as if such amount were a royalty.'

(b) EFFECTIVE DATE- The amendment made by this section shall apply to amounts treated as received pursuant to section 367(d)(2) of the Internal Revenue Code of 1986 on or after August 5, 1997.

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