VALUATION OF ASSETS FOR PASSIVE FOREIGN INVESTMENT COMPANY DETERMINATION.

SEC. 1123. VALUATION OF ASSETS FOR PASSIVE FOREIGN INVESTMENT COMPANY DETERMINATION. (a) In General.—Section 1297, as redesignated by section 1122, is amended by adding at the end the following new subsection: “(e) Methods for Measuring Assets.—111 STAT. 978 “(1) Determination using value.—The determination under subsection (a)(2) shall be made on the basis of the value of the assets of a foreign corporation if— “(A) such corporation is a publicly traded corporation for the taxable year, or “(B) paragraph (2) does not apply to such corporation for the taxable year. “(2) Determination using adjusted bases.—The determination under subsection (a)(2) shall be based on the adjusted bases (as determined for the purposes of computing earnings and profits) of the assets of a foreign corporation if such corporation is not described in paragraph (1)(A) and such corporation— “(A) is a controlled foreign corporation, or “(B) elects the application of this paragraph. An election under subparagraph (B), once made, may be revoked only with the consent of the Secretary. “(3) Publicly traded corporation.—For purposes of this subsection, a foreign corporation shall be treated as a publicly traded corporation if the stock in the corporation is regularly traded on— “(A) a national securities exchange which is registered with the Securities and Exchange Commission or the national market system established pursuant to section UA of the Securities and Exchange Act of 1934, or “(B) any exchange or other market which the Secretary determines has rules adequate to carry out the purposes of this subsection.”. (b) Conforming Amendments.—Section 1297(a), as redesignated by section 1122, is amended— (1) by striking “(by value)” and inserting “(as determined in accordance with subsection (e))”, and (2) by striking the last two sentences.