Us Congress 2025-2026 Regular Session

Us Congress House Bill HB2186 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 2186
5	5	To amend the Internal Revenue Code of 1986 to restore the limitation
6	6	on downward attribution of stock ownership in applying constructive
7	7	ownership rules.
8	8	IN THE HOUSE OF REPRESENTATIVES
9	9	MARCH18, 2025
10	10	Mr. E
11	11	STES(for himself and Ms. MOOREof Wisconsin) introduced the
12	12	following bill; which was referred to the Committee on Ways and Means
13	13	A BILL
14	14	To amend the Internal Revenue Code of 1986 to restore
15	15	the limitation on downward attribution of stock owner-
16	16	ship in applying constructive ownership rules.
17	17	Be it enacted by the Senate and House of Representa-1
18	18	tives of the United States of America in Congress assembled, 2
19	19	SECTION 1. RESTORATION OF LIMITATION ON DOWNWARD 3
20	20	ATTRIBUTION OF STOCK OWNERSHIP IN AP-4
21	21	PLYING CONSTRUCTIVE OWNERSHIP RULES. 5
22	22	(a) I
23	23	NGENERAL.—Section 958(b) of the Internal 6
24	24	Revenue Code of 1986 is amended— 7
25	25	(1) by inserting after paragraph (3) the fol-8
26	26	lowing: 9
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29	29	•HR 2186 IH
30	30	‘‘(4) Subparagraphs (A), (B), and (C) of sec-1
31	31	tion 318(a)(3) shall not be applied so as to consider 2
32	32	a United States person as owning stock which is 3
33	33	owned by a person who is not a United States per-4
34	34	son.’’, and 5
35	35	(2) by striking ‘‘Paragraph (1)’’ in the last sen-6
36	36	tence and inserting ‘‘Paragraphs (1) and (4)’’. 7
37	37	(b) F
38	38	OREIGNCONTROLLEDUNITEDSTATESSHARE-8
39	39	HOLDERS.—Subpart F of part III of subchapter N of 9
40	40	chapter 1 of such Code is amended by inserting after sec-10
41	41	tion 951A the following new section: 11
42	42	‘‘SEC. 951B. AMOUNTS INCLUDED IN GROSS INCOME OF 12
43	43	FOREIGN CONTROLLED UNITED STATES 13
44	44	SHAREHOLDERS. 14
45	45	‘‘(a) I
46	46	NGENERAL.—In the case of any foreign con-15
47	47	trolled United States shareholder of a foreign controlled 16
48	48	foreign corporation— 17
49	49	‘‘(1) this subpart (other than sections 951A, 18
50	50	951(b), and 957) shall be applied with respect to 19
51	51	such shareholder (separately from, and in addition 20
52	52	to, the application of this subpart without regard to 21
53	53	this section)— 22
54	54	‘‘(A) by substituting ‘foreign controlled 23
55	55	United States shareholder’ for ‘United States 24
56	56	shareholder’ each place it appears therein, and 25
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59	59	•HR 2186 IH
60	60	‘‘(B) by substituting ‘foreign controlled 1
61	61	foreign corporation’ for ‘controlled foreign cor-2
62	62	poration’ each place it appears therein, and 3
63	63	‘‘(2) section 951A shall be applied with respect 4
64	64	to such shareholder— 5
65	65	‘‘(A) by treating each reference to ‘United 6
66	66	States shareholder’ in such section as including 7
67	67	a reference to such shareholder, and 8
68	68	‘‘(B) by treating each reference to ‘con-9
69	69	trolled foreign corporation’ in such section as 10
70	70	including a reference to such foreign controlled 11
71	71	foreign corporation. 12
72	72	‘‘(b) F
73	73	OREIGNCONTROLLED UNITEDSTATES 13
74	74	S
75	75	HAREHOLDER.—For purposes of this section, the term 14
76	76	‘foreign controlled United States shareholder’ means, with 15
77	77	respect to any foreign corporation, any United States per-16
78	78	son which would be a United States shareholder with re-17
79	79	spect to such foreign corporation if— 18
80	80	‘‘(1) section 951(b) were applied by substituting 19
81	81	‘more than 50 percent’ for ‘10 percent or more’, and 20
82	82	‘‘(2) section 958(b) were applied without regard 21
83	83	to paragraph (4) thereof. 22
84	84	‘‘(c) F
85	85	OREIGNCONTROLLED FOREIGNCORPORA-23
86	86	TION.—For purposes of this section, the term ‘foreign con-24
87	87	trolled foreign corporation’ means a foreign corporation, 25
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90	90	•HR 2186 IH
91	91	other than a controlled foreign corporation, which would 1
92	92	be a controlled foreign corporation if section 957(a) were 2
93	93	applied— 3
94	94	‘‘(1) by substituting ‘foreign controlled United 4
95	95	States shareholders’ for ‘United States share-5
96	96	holders’, and 6
97	97	‘‘(2) by substituting ‘section 958(b) (other than 7
98	98	paragraph (4) thereof)’ for ‘section 958(b)’. 8
99	99	‘‘(d) R
100	100	EGULATIONS.—The Secretary shall prescribe 9
101	101	such regulations or other guidance as may be necessary 10
102	102	or appropriate to carry out the purposes of this section, 11
103	103	including regulations or other guidance— 12
104	104	‘‘(1) to treat a foreign controlled United States 13
105	105	shareholder or a foreign controlled foreign corpora-14
106	106	tion as a United States shareholder or as a con-15
107	107	trolled foreign corporation, respectively, for purposes 16
108	108	of provisions of this title other than this subpart, 17
109	109	and 18
110	110	‘‘(2) to prevent the avoidance of the purposes of 19
111	111	this section.’’. 20
112	112	(c) C
113	113	LERICALAMENDMENT.—The table of sections 21
114	114	for subpart F of part III of subchapter N of chapter 1 22
115	115	is amended by inserting after the item relating to section 23
116	116	951A the following new item: 24
117	117	‘‘Sec. 951B. Amounts included in gross income of foreign controlled United
118	118	States shareholders.’’.
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122	122	(d) EFFECTIVEDATE.—The amendments made by 1
123	123	this section shall apply to— 2
124	124	(1) the last taxable year of foreign corporations 3
125	125	beginning before January 1, 2025, and each subse-4
126	126	quent taxable year of such foreign corporations, and 5
127	127	(2) taxable years of United States persons in 6
128	128	which or with which such taxable years of foreign 7
129	129	corporations end. 8
130	130	(e) N
131	131	OINFERENCE.—The amendments made by this 9
132	132	section shall not be construed to create any inference with 10
133	133	respect to the proper application of any provision of the 11
134	134	Internal Revenue Code of 1986 with respect to taxable 12
135	135	years beginning before the taxable years to which such 13
136	136	amendments apply. 14
137	137	Æ
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