Revises provisions concerning treatment of controlled foreign corporations, including: (1) expanding the de minimis rule; (2) excluding from the definition of "foreign base company oil related income" the pipeline transportation of oil or gas within such foreign country; (3) repealing rules applicable to foreign personal holding companies and foreign investment companies; and (4) amending the definition of foreign personal holding company income to include income from certain personal services contracts and sale of such contracts.
Sets forth provisions concerning foreign tax credit, including: (1) extending the period in which excess foreign taxes may be carried; (2) defining overall domestic loss and setting forth provisions for determining taxable income for any taxpayer sustaining such a loss; (3) issuing special rules relating to financial services income; (4) dictating rules for the treatment of dividends from certain corporations and extending the look-through treatment for such corporations; (5) extending the carryforward period for foreign tax credits; (6) repealing the limitation of such credits under the alternative minimum tax; and (7) eliminating limitation on such credits with regard to oil or gas extraction taxes.
Makes other revisions, including: (1) expanding the deduction for dividends from foreign corporations with U.S. income; (2) exempting certain foreign corporations from uniform capitalization rules; (3) setting forth provisions concerning airline mileage awards to certain foreign persons; and (4) repealing the special capital gains tax on nonresident aliens.
Permits, for interest allocation rule purposes, treating each electing worldwide affiliated group as an affiliated group, subject to exceptions.
Makes permanent the subpart F exception for active income financing (presently, the exception expires for taxable years beginning after December 31, 2006).
Repeals provisions of the FSC Repeal and Extraterritorial Income Exclusion Act of 2000 (which amended the Code) which, subject to exception, excluded from extraterritorial income from gross income.