H. R. 5396
IN THE HOUSE OF REPRESENTATIVES
November 19, 2004
Mr. Acevedo-Vilá introduced the following bill; which was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to allow a deduction for a portion of any dividend received by a domestic corporation from a qualified foreign corporation.
This Act may be cited as the
Financial Transactions Equity Act of 2004.
Dividend received deduction for dividends received from qualified foreign corporations
Section 245 of the Internal Revenue Code of 1986 (relating to dividends received from certain foreign corporations) is amended by adding at the end the following new subsection:
Dividends received from corporations organized under the laws of the Commonwealth of Puerto Rico
In the case of dividends received by a domestic corporation from a corporation organized under the laws of the Commonwealth of Puerto Rico, there shall be allowed as a deduction an amount equal to the percent (specified in section 243 for the taxable year) of such dividends.
Exclusion of certain dividends
Paragraph (1) shall not apply to any dividend received from a corporation organized under the laws of the Commonwealth of Puerto Rico to the extent that the dividend consists of earnings and profits accumulated during a taxable year that such corporation was a controlled foreign corporation (as defined in section 957).
Coordination with section 1248
For purposes of this subsection, the term dividend does not include any amount treated as a dividend under section 1248.
The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.