TRANSFERS OF PROPERTY TO FOREIGN PARTNERSHIPS SUBJECT TO INFORMATION REPORTING COMPARABLE TO INFORMATION REPORTING FOR SUCH TRANSFERS TO FOREIGN CORPORATIONS.

SEC. 1144. TRANSFERS OF PROPERTY TO FOREIGN PARTNERSHIPS SUBJECT TO INFORMATION REPORTING COMPARABLE TO INFORMATION REPORTING FOR SUCH TRANSFERS TO FOREIGN CORPORATIONS. (a) In General.—Paragraph (1) of section 6038B(a) (relating to notice of certain transfers to foreign corporations) is amended to read as follows: “(1) transfers property to— “(A) a foreign corporation in an exchange described in section 332, 351, 354, 355, 356, or 361, or “(B) a foreign partnership in a contribution described in section 721 or in any other contribution described in regulations prescribed by the Secretary,”. (b) Exceptions.—Section 6038B is amended by redesignating subsection (b) as subsection (c) and by inserting after subsection (a) the following new subsection: “(b) Exceptions for Certain Transfers to Foreign Partnerships; Special Rule.— “(1) Exceptions.—Subsection (a)(1)(B) shall apply to a transfer by a United States person to a foreign partnership only if— “(A) the United States person holds (immediately after the transfer) directly or indirectly at least a 10-percent interest (as defined in section 6046A(d)) in the partnership, or “(B) the value of the property transferred (when added to the value of the property transferred by such person or any related person to such partnership or a related partnership during the 12-month period ending on the date of the transfer) exceeds $100,000.111 STAT. 985 For purposes of the preceding sentence, the value of any transferred property is its fair market value at the time of its transfer. “(2) Special rule.—If by reason of an adjustment under section 482 or otherwise, a contribution described in subsection (a)(1) is deemed to have been made, such contribution shall be treated for purposes of this section as having been made not earlier than the date specified by the Secretary.”. (c) Modification of Penalty Applicable to Foreign Corporations and Partnerships.— (1) In general.—Paragraph (1) of section 6038B(b) is amended by striking “equal to” and all that follows and inserting “equal to 10 percent of the fair market value of the property at the time of the exchange (and, in the case of a contribution described in subsection (a)(1)(B), such person shall recognize gain as if the contributed property had been sold for such value at the time of such contribution).”. (2) Limit on penalty.—Section 6038B(b) is amended by adding at the end the following new paragraph: “(3) Limit on penalty.—The penalty under paragraph (1) with respect to any exchange shall not exceed $100,000 unless the failure with respect to such exchange was due to intentional disregard.”. (d) Effective Date.— (1) In general.—The amendments made by this section note shall apply to transfers made after the date of the enactment of this Act. (2) Election of retroactive effect.—Section 1494(c) of the Internal Revenue Code of 1986 shall not apply to any transfer after August 20, 1996, if all applicable reporting requirements under section 6038B of such Code (as amended by this section) are satisfied. The Secretary of the Treasury or his delegate may prescribe simplified reporting requirements under the preceding sentence.