[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5396 Introduced in House (IH)]






108th CONGRESS
  2d Session
                                H. R. 5396

 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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 19, 2004

 Mr. Acevedo-Vila introduced the following bill; which was referred to 
                    the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Transactions Equity Act of 
2004''.

SEC. 2. DIVIDEND RECEIVED DEDUCTION FOR DIVIDENDS RECEIVED FROM 
              QUALIFIED FOREIGN CORPORATIONS.

    (a) In General.--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:
    ``(d) Dividends Received From Corporations Organized Under the Laws 
of the Commonwealth of Puerto Rico.--
            ``(1) In general.--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.
            ``(2) 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).
            ``(3) Coordination with section 1248.--For purposes of this 
        subsection, the term `dividend' does not include any amount 
        treated as a dividend under section 1248.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.
                                 <all>