APPLICATION OF INVESTMENT CREDIT TO PROPERTY USED IN POSSESSIONS OF THE UNITED STATES.

SEC. 201. APPLICATION OF INVESTMENT CREDIT TO PROPERTY USED IN POSSESSIONS OF THE UNITED STATES. (a) Property Used by Domestic Corporations, Etc.— Section 48(a)(2)(B) (relating to property used outside the United States) is amended— (1) by striking out “and” at the end of clause (v); (2) by striking out the period at the end of clause (vi) and inserting in lieu thereof and”; and (3) by adding at the end thereof the following new clause: “(vii) any property which is owned by a domestic corporation (other than a corporation entitled to the 80 Stat. 1576benefits of section 931 or 934(b)) or by a United States citizen (other than a citizen entitled to the benefits of section 931, 932, 933, or 934(c)) and which is used predominantly in a possession of the United States by such a corporation or such a citizen, or by a corporation created or organized in, or under the law of, a possession of the United States.” (b) Effective Date.— The amendments made by subsection (a) shall apply to taxable years ending after December 31, 1965, but only with respect to property placed in service after such date. In applying section 46(b) of the Internal Revenue Code of 1954 (relating to carryback and carryover of unused credits), the amount of any investment credit carryback to any taxable year ending on or before December 31, 1965, shall be determined without regard to the amendments made by this section.