§ 898 — Taxable Year Of Certain Foreign Corporations

(a) For purposes of this title, the taxable year of any specified foreign corporation shall be the required year determined under subsection (c). (b) For purposes of this section— (1) The term “specified foreign corporation” means any foreign corporation— (A) which is treated as a controlled foreign corporation for any purpose under subpart F of part III of this subchapter, and (B) with respect to which the ownership requirements of paragraph (2) are met. (A) The ownership requirements of this paragraph are met with respect to any foreign corporation if a United States shareholder owns, on each testing day, more than 50 percent of— (i) the total voting power of all classes of stock of such corporation entitled to vote, or (ii) the total value of all classes of stock of such corporation. (B) For purposes of subparagraph (A), the rules of subsections (a) and (b) of section 958 shall apply in determining ownership. (3) The term “United States shareholder” has the meaning given to such term by section 951(b), except that, in the case of a foreign corporation having related person insurance income (as defined in section 953(c)(2)), the Secretary may treat any person as a United States shareholder for purposes of this section if such person is treated as a United States shareholder under section 953(c)(1). (1) The required year is— (A) the majority U.S. shareholder year, or (B) if there is no majority U.S. shareholder year, the taxable year prescribed under regulations. (A) For purposes of this subsection, the term “majority U.S. shareholder year” means the taxable year (if any) which, on each testing day, constituted the taxable year of— (i) each United States shareholder described in subsection (b)(2)(A), and (ii) each United States shareholder not described in clause (i) whose stock was treated as owned under subsection (b)(2)(B) by any shareholder described in such clause. (B) The testing days shall be— (i) the first day of the corporation’s taxable year (determined without regard to this section), or (ii) the days during such representative period as the Secretary may prescribe.